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Y13 Microeconomics Notes

Monopolistic Competition | Notes

What are the characteristics of monopolistic competition? 1. low barriers to entry and exit 2. slight product differentiation Monopolistic competition diagram in the short-run Efficiencies in the short-run * not productively efficient because MC≠AC at q1 * not allocatively efficient because AR≠MC at q1 What happens in monopolistic competition in

Y13 Microeconomics Notes

Efficiency | Notes

What is productive efficiency? 1. productive efficiency is achieved at the quantity where MC=AC 2. this is when firms minimise their average costs 3. this means firms are producing the maximum possible output at the minimum possible cost 4. in the long-run, it means firms are fully able to

Y13 Microeconomics Notes

Perfect Competition | Notes

What are the characteristics of perfect competition? 1. no barriers to entry or exit 2. perfect information 3. identical products 4. firms are price-takers Perfect competition diagram in the short-run Efficiencies in the short-run * not productively efficient because MC≠AC at q1 * allocatively efficient because AR=MC at q1 What

Y12 Macroeconomics Notes

Aggregate Supply | Notes

What is aggregate supply? The total planned level of output in the economy at each price level. What factors affect short-run aggregate supply? Costs of production e.g. productivity, wages, raw material prices, exchange rates What is long-run aggregate supply? The productive potential of the economy. What factors affect long-run

Y13 Macroeconomics Notes

Exchange Rates | Notes

What is an exchange rate? The price of a currency in terms of another What is a fixed exchange rate? The value of the currency is controlled by the central bank. The central bank uses reserves of their own currency and a foreign currency. For example, China want to maintain

Y12 Macroeconomics Notes

Aggregate Demand | Notes

What is aggregate demand? Aggregate demand is the total planned spending on goods and services in the economy at each price level. What are the factors of aggregate demand? AD = C + I + G + (X-M) * consumer spending * real incomes * consumer confidence * interest rates * business spending on capital goods * business confidence (accelerator

Y12 Macroeconomics Notes

Unemployment | Notes

Unemployment 1. What is unemployment? 2. How is unemployment measured? 3. What is seasonal unemployment? 4. What is frictional unemployment? 5. What is cyclical unemployment? 6. What is structural unemployment? 7. Why is the impact of high unemployment? What is unemployment? The number of people who are willing and able

Y12 Macroeconomics Notes

Economic Growth | Notes

What is the difference between real and nominal? Real - adjusted for inflation Nominal - not adjusted for inflation What does per capita mean? per person (divide by the population) What is real GDP? The total value of goods and services produced in the UK economy What is (actual) economic

Y12 Macroeconomics Notes

Inflation | Notes

1. How is inflation measured? 2. What is inflation? 3. What is deflation? 4. What is disinflation? 5. The two causes of inflation 6. Why is the inflation target is 2%? 1. What is the impact of high inflation 2. What is the impact of deflation How is inflation measured?