A level Microeconomics key terms

Made this quiz with my benefit in mind but you are welcome to try it
Sorry if some of the vocab is different to what you use
From Edexcel exam board
Quiz by CharlieRich16
Last updated: October 13, 2022
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First submittedFebruary 10, 2021
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Government grants firms money in order to increase supply or lower price
Once provided, it's impossible to stop someone from using it without paying
Goods or services that don't use up any factor inputs when supplied
Free goods
The responsiveness of supply to a change in price
Price Elasticity of Supply
Tax on consumption, paid by the final consumer
Indirect Tax
One person using it does not reduce the amount avilable for others
The price at which supply = demand
Equilibrium price
Objective statements that can be tested, amended or rejected by referring to available evidence
Positive Statements
The quantity that consumers are willing and able to buy at a given price in a given amount of time
Exists where goods have more than one use
Composite demand
Resources that are finite in supply
Non renewable resources
Quantity demanded for this good decreases when income increases
Set tax per unit
Specific Tax
Typically goods that are provided by the government
Public goods
Consumers and firms react to price change, If prices rise, firms should produce more. If prices fall, consumers should consume more
A fall in price increases the real purchasing power of consumers
Income effect
The cost or impact of a negative externality on the 3rd party
Social cost
When changes in price encourage buyers and sellers to change the quantity they buy and sell
Shows the maximum amount that can be produced of two given goods
Tax on all types of income. Paid directly by the payee
Direct Tax
When people have inaccurate or incomplete data and so make wrong choices and decisions
Information Failure
An inefficeint distribution of goods and services in the free market
Market Failure
The difference between the price you are willing to pay for a product and the price you paid for it
Consumer Surplus
Once provided, people cannot reject it
Resources that are replaceable over time
Renewable resources
The quantity demand for this good increases (Less than proportionally) when income increases
The cost of the next best alternative forgone
Opportunity Cost
When markets don't provide a good or service at all
Complete market failure
When changes in price lead to more or less being produced, so increasing or limiting the quantity demanded by buyers
Goods that improve efficiency and productive potential of an economy in the long run
Capital goods
The responsiveness of quantity demanded to a change in price
Price elasticity of demand
A compulsory contribution to state revenue
The difference between the price you are willing to sell at and the price you actually sell at
Producer Surplus
Goods that participate to more than one cycle of consumption
The utlity decreases the more we use it
Diminishing Returns
Total satisfaction from a given level of consumption
Total Utility
The responsiveness of quantity demanded of good Y to a change in price of good X
Cross price elasticity of demand
Subjective statements, they carry valid judgements about what ought to be
Normative Statements
When an economy focuses all of its energy on one industry
The quantity of a good or service that producers are willing and able to offer for sale at each possible price in given time periods
Eliminates excess within a market as it naturally moves towards the equilibrium price
Invisible hand theory
The change in satisfaction from consuming an extra unit
Marginal Utility
A percentage tax
Ad Valorem Tax
The demand for a factor of production used to produce a good or service
Derived demand
The responsiveness of quantity demanded to a change in income
Income elasticity of demand
The cost of borrowing and reward for saving
Interest rate
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