AS Economics Units 14 and 15 Revision

Asymmetric information is when....

• both the buyer and seller have an advantage in terms of information.

• information is shared equally between the buyer and seller.

• is not the opposite of symmetric information.

• the buyer and seller have different levels of information.

• both the buyer and seller have exactly the same level of information.

When the market fails to supply any of a good that is demanded, this is called...

• complete market failure.

• market failure

• partial market failure.

• asymmetric information.

partial market failure is when...

• goods are overpriced.

• goods exist in insufficient or excessive quantities.

• goods do not exist.

• where customers have too much choice.

a missing market is when...

• the market mechanism fails to supply any of a given good.

• sellers are unable to sell any of their goods.

• When Yandex Karta is broken and can't find where you want to go.

• when supply and demand reach equilibrium.

The socially optimal level is where the marginal social cost is equal to the marginal social benefit. How is it represented on this graph?

• OA

• OB

• EF

• FE

A business wants to make the biggest profit possible, which point should they try to achieve?

• OA

• OB

• EO

• FE

Which two letters represent the optimal social level?

• OA

• OC

• OB

• AB

Which two letters represent the biggest profit?

• OA

• OC

• OB

• AB

The shaded area is called the 'welfare loss' or the 'deadweight loss' but what does this mean?

• the loss of profit.

• the lost social benefit.

• a fall in demand.

• the level at which society benefits most.

What does 'positive consumption externalities' mean...

• consumption has a negative impact.

• private benefits exceed social benefits.

• social benefits exceed private benefits.

• social benefits are negative.