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Summary A Level Economics Key Terminology Sheet for Microeconomics
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Comprehensive A-Level Microeconomics Keyword Guide: Condensed, essential terms for mastering microeconomic concepts.
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MICROECONOMICS1. Demand: The quantity of a good or service that consumers are willing and
able to buy at various prices during a given period.
2. Supply: The quantity of a good or service that producers are willing and able
to offer for sale at various prices during a given period.
3. Market: A place or mechanism where buyers and sellers come together to
trade goods or services.
4. Equilibrium: The point at which quantity demanded equals quantity supplied,
resulting in a stable market price.
5. Elasticity: A measure of the responsiveness of quantity demanded or
supplied to changes in price, income, or other factors.
6. Consumer surplus: The difference between what consumers are willing to
pay for a good or service and what they actually pay.
7. Producer surplus: The difference between the price at which producers are
willing to sell a good or service and the price they actually receive.
8. Market failure: When the market fails to allocate resources efficiently, leading
to a misallocation of resources.
9. Externalities: The unintended side effects or consequences of an economic
activity that affect third parties not directly involved in the activity.
10. Public goods: Goods that are non-excludable and non-rivalrous in
consumption, meaning individuals cannot be excluded from using them, and
one person's consumption does not reduce the availability of the good for
others.
11. Merit goods: Goods that are under-consumed in a free market, often
because their full social benefits are not reflected in the market price.
12. Demerit goods: Goods that are over-consumed in a free market, often
because their full social costs are not reflected in the market price.
13. Market structure: The characteristics of a market, such as the number of
firms, barriers to entry, and the degree of product differentiation.
14. Perfect competition: A market structure characterized by a large number of
small firms producing identical products with no barriers to entry or exit.
15. Monopoly: A market structure characterized by a single seller with significant
control over the supply of a good or service and barriers to entry.
16. Monopolistic competition: A market structure characterized by many firms
producing similar but differentiated products, with some control over price and
low barriers to entry.
17. Oligopoly: A market structure characterized by a small number of large firms
dominating the market, often with significant barriers to entry.
18. Game theory: A branch of microeconomics that studies strategic interactions
between rational decision-makers.
19. Price discrimination: The practice of charging different prices to different
consumers for the same good or service based on their willingness to pay.
20. Factor markets: Markets where factors of production (land, labor, capital,
entrepreneurship) are bought and sold.
21. Utility: The satisfaction or pleasure derived from consuming a good or
service.
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