IAL Economics revision: Chapters 3-4

What is allocative efficiency?

• When social welfare is maximized

• When resources are distributed equally

• When resources are redistributed without making anyone worse off

• When resources are allocated randomly

What are capital goods?

• Goods and services used by people to satisfy their needs and wants

• Goods used in the production of other goods

• Goods produced in the primary sector

• Goods produced in the service sector

What are consumer goods?

• Goods used in the production of other goods

• Goods produced in the primary sector

• Goods and services used by people to satisfy their needs and wants

• Goods produced in the service sector

What is a margin?

• A point of possible change

• A measure of value

• A store of value

• A method of deferred payment

What is a production possibility frontier?

• A curve that shows the maximum potential level of output of one good given a level of output for all other goods in the economy

• A curve that shows the maximum potential level of output of all goods in the economy

• A curve that shows the minimum potential level of output of one good given a level of output for all other goods in the economy

• A curve that shows the minimum potential level of output of all goods in the economy

What is capital productivity?

• Output per unit of capital employed

• Output per worker

• Output per unit of input employed

• Output per unit of time

What is division of labour?

• Specialization by workers, who perform different tasks at different stages of production to make a good or service, in cooperation with other workers

• The value of the assets owned by the shareholders

• The ability to change an asset into cash

• The tendency for the world economy to work as one unit

What is equity in a company?

• The value of the assets owned by the shareholders

• The ability to change an asset into cash

• The tendency for the world economy to work as one unit

• Specialization by workers, who perform different tasks at different stages of production to make a good or service, in cooperation with other workers

What is a financial market?

• A market that is a distinct and identifiable part of a larger market

• A market where buyers and sellers can buy or trade a range of services or assets that are fundamentally monetary in nature

• A market that provides services to individuals

• A market involved in the production of goods

What is globalization?

• The tendency for the world economy to work as one unit

• The ability to change an asset into cash

• Specialization by workers, who perform different tasks at different stages of production to make a good or service, in cooperation with other workers

• The value of the assets owned by the shareholders