Economics vocab 1.3 microeconomic decision makers 낱말 카드 | Quizlet

Money

An item which is generally acceptable as a means of payment

Commercial banks

Banks which are aim to make a profit by providing a range of banking services to households and firms

Central banks

government- owned bank which provides banking services to the gov and commercial banks and operates monetary policy

Liquidity

being able to turn an asset into cash quickly without a loss

Disposable income

Income left after income tax has been deducted and state benefits received

Wealth

Stock of assets including money held in bank accounts, shares in companies, gov bonds, cars and property

Rate of interest

charge for borrowing money and payment for lending property

Average Propensity to Consume (APC)

proportion of household disposable income which is spent

Consumption

expenditure by household disposable income that is saved

Savings ratio

The proportion of households disposable income that is saved

Average Propensity to Save (APS)

Proportion of household disposable income that is saved.

Mortgage

A loan to help buy a house

Earnings

total pay received by a worker

Wage rate

Basic wage a worker receives per unit of time or unit of output

National minimum wage (NMW)

min rate of wage for an hour's work, fixed by the gov for the whole economy

Elasticity of demand for labour

measure of the responsiveness of demand for labour to a change in wage rate

Elasticity of supply of labour

Measure of the responsiveness of supply of labour to a change in the wage rate

Specialisation

the concentration on particular products or tasks

Division of labour

workers specialising in particular tasks

Trade Union

an association which represents the interest of a group of workers

Colllective bargaining

representatives of workers negotiating with employers' associations

Industrial action

when workers disrupt production to put pressure on employers to agree to their demands

Industry

A group of firms producing the same product

Primary sector

covers industries which extract natural resources.

Secondary sector

covers manufacturing and construction industries

Tertiary sector

overs industries which provide services

Quatemary sector

covers service industries that are knowledge based

Interanl growth

increase in the size of a firm resulting from it enlarging exisiting plants or opening new ones

External growth

increase in the size of a firm resulting from it merging or taking over another firm

Horizontal merger

the merger of firms producing the same product and at the same stage of production

Vertical merger

the merger of fims producing the same product,but at a different sate of production

Vertical merger backwards

merger with a firm at an eariler stage of the supply chain

Vertical merger forwards

merger with a firm at a later stage of the supply chain

Conglomerate merger

Merger between firms producing different products

Internal economies of scale

lower long run average costs resulting from a firm growing in size

External economies of scale

Low long run average costs resulting from an industry growing in size

Interanl diseconomies of scale

higher longrun average costs arising from an firm grwoing too large

External diseconomies of scale

higher longrun average costs arising from an industry growing too large

Total cost

total amount that has to be spent on the factors of production used to produce a product

Average total cost

total cost divided by output

fixed costs

cost which don't change with output in short run

Average fixed cost

total fixed cost divided by outpt

Variable cost

costs that change with output

Average variable cost

total variable cost divided by output

Price

The amount of money that has to be given to obtain a product

Total revenue

total amount of moeny received from selling a product

price x quantity sold / PxQ

Average revenue

total revenue divided by the quantity sold/price

Profit satisficing

sacrificing some profit to achieve some goals

Profit maximisation

making as much profit as possible

Market structure

Conditions which exist in a market including the number of firms

Competitive market

number of firms that compete with each other

Monolpoly

Maket with a sinlge supplier

Barrier to entry

anything that makes it difficult for a firm to stop producing the product

Barrier to exit

anhything that makes it difficult for a firm to stop producing the product

Scale of production

Size of production units and the methods of production used

Functions of money

• Medium to exchange

• unit of accounts

• store of value

• standard of deferred payments

Characteristics of money

• Durable

• Portable

• Homogeneous

• recognisable

• Divisible

• No intrinsic value

• Generally acceptable

Role and Importance of commercial banks

• Accept deposits (돈을 맡기다)

• lending/ loans

• enable payments