AS Level Microeconomics Flashcards

Flashcards based on AS Level microeconomics UCAS mocks lecture notes.

Indirect Tax

A tax imposed by the government that increases the cost of production for manufacturers, shifting the supply curve vertically upward.

Tax Burden

The relative share of a tax borne by consumers and producers, determined by the price elasticity of demand.

Deadweight Loss

A loss of economic efficiency due to the reduction in mutually beneficial trades, often represented by a triangle on a supply and demand graph.

Pigouvian Tax

A tax designed to internalize external costs by making polluters pay for the social damage they cause, ideally equal to the marginal external cost.

Double Dividend (in Environmental Economics)

The concept that tax revenue from environmental taxes can be used to fund environmental cleanup or renewable alternatives.

MPC

Marginal Private Cost: The cost to the producer of an additional unit of a good or service.

MSC

Marginal Social Cost: The total cost to society of producing an additional unit of a good or service. It includes both the private cost and any external costs.

Dynamic Analysis

An economic analysis that considers how elasticities, technology, and behavior change over time in response to a policy or event.

Static Analysis

An economic analysis that focuses on the immediate or short-term effects of a policy or event, without considering changes over time.

PACED Approach

A framework for graph analysis: Point out, Analyze movements/shifts, Calculate changes, Explain economic reasoning, Discuss implications and limitations.

Consumer Burden

The portion of a tax that is paid by consumers, calculated as the difference between the price consumers pay after the tax and the original price.

Producer Burden

The portion of a tax that is effectively paid by producers, calculated as the difference between the original price and the price producers receive after the tax.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing.

X-inefficiency

The failure to minimize costs due to lack of competitive pressure.

Ceteris Paribus

A Latin phrase meaning 'all other things being equal,' used as a qualification in economic analysis to isolate the effect of one variable.

Positive Externality

A benefit that is enjoyed by a third-party as a result of an economic transaction.