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2026 sem1 year 11 econ paper3 definitions - Coggle Diagram
2026 sem1 year 11 econ paper3 definitions
theories of the firm and behavioural economics
rule of thumb
base on ur exprerience to make choices
availability bias
base on the information that is most easily recalled or vivid to make choices
anchoring bias
base on the FIRST information that received, $200 become $100 feel like u earn smth
framing bia
base on the way information are presented
bounded rationality
base on their limited cognitive capacity and information ,the rationality to do the decision
bounded self control
base on the short term profit and the limited ability of self controlled to make choices
bounded selfishness
people do care about the environment and social with limited ability when theyre doing decisions
prefect information
people do not have full access of getting full information when theyre making decisions
object of firms
growth maximization
means increasing the size of the fir, and building market power and reducing risks
satisficing
balance different stakeholders interests instead of purely maximizing profit like communicating with the stakeholders?
revenue maximization
occurs when the firm aims to maximze total revenue, when the marginal revenue is 0
corporate social responsibility CSR
the firms must consider ethical social and environmental factors
profit maximization
the goal of producing when the value of tr-tc is maximized
choice architecture and nudge theory
choice architecture
when the consumers are making decisions, the way that producers are presenting is influencing their decisions
showing the information that they want to show to the consumers
nudge theory
suggest but not forcing
use a gentle way to steer people toward making better decisions without restricting their freedom of choices
government intervention
per unit tax
a fixed amount of tax that paid by unit of output
indirect tax
a tax imposed on expenditure, paid by producers to the government
price ceiling
a maximum legal price set below equilibrium to protect consumers
price floor
a minimum legal price set above equilibrium to protect producers
subsidy
a payment by government to producers to increase output and decrease the cost
law of demand
as the price of a good increase the quantity demand will decrease, ceteris paribus
law of supply
as the price of a good increase the quantity supply will increase, ceteris paribus
consumer surplus
the difference between the maximum price consumers are willing to pay and the price they actually pay
producer surplus
the difference between the minimum price producers are willing to accept and the price they actually receive
market failure and externalities
positive externality of consumption
when the consumption of a good creates external benefits that accrue to third parties
negative externality of production
when the production of a good imposes external costs on third parties who are not directly involved in the production
positive externality of production
when the production of a good creates external benefits that accrue to third parties
negative externality of consumption
when the consumption of a good imposes external costs on third parties who are not directly involved in the consumption
cost
social cost
external cost+private cost
received by the society
social benefit
external benefite+private benefit
received by the society
private cost
taken by the producers only
private benefite
received by the consumers only
market power and competition
allocative efficiency
p=mc
market power
the ability that a firm ca influence or control the price of the good in the market
monopoly
only one firm in the market and monopolise the whole market having the market power
price searcher
perfect competition
price taker
large numbers of firms and sell the homogeneous products
oligopoly
few firms and selling the homogeneous products
price seacher
oligopolistic competition
large numbers of firms and seel the heterogeneous prodcuts
price taker
circular flow of income model
