Y12 Microeconomics Definitions II - Turbo Round

A spill over cost to a third party where the social cost of an activity is greater than the private cost (negative externality of production) and where the private benefit is greater than the social benefit (negative externality of consumption)

(a)  

A situation that exists where individual consumers cannot be excluded from consumption

(a)  

A situation that exists where consumption by one person does not prevent simultaneous consumption by others

(a)  

Goods for which an increase in income leads to an increase in quantity demanded, i.e. Goods with a positive income elasticity of demand

• Inferior good

• Merit good

• Normal good

• Demerit good

A value judgment about ‘what ought to be’ which cannot be tested

(a)  

A statement of fact about ‘what is’ which can be tested

(a)  

A spill over benefit to a third party where the private cost of an activity is greater than the social cost (positive externality of production) and where the social benefit  is greater than the private benefit (positive externality of consumption)

(a)  

The responsiveness of quantity demanded to a % change in the price of the product

(a)  

Which is not a function of the environment?

• Absorber of waste

• Provider of O2

• Provider of amenities

• Provider of resources

A good that is non-excludable and non-rivalrous – consumers cannot be excluded from consuming the good and consumption by one person does not affect the consumption of the good by another person

(a)