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    Definitions are the same in every examboard, right?

    Command Economy: Economic system where in which decisions about production and consumption are made by a planning authority, usually the govt

    External benefits: Positive spill over effects arising from an economic transaction

    External Cost: Negative spillover effects arising from an economic transaction

    Free market economy: Economic system where resources are allocated by the price mechanism

    Free rider problem: When a person consumes a good without paying for it

    Imperfect market information: Consumers lacking knowledge to make rational choices

    Indirect tax: Tax on expenditure

    Mixed economy: Where resources are partly allocated by the price mechanism and partly by the govt

    Normative statement: Value judgement that can't be test as true or false

    Opportunity cost: Value of the next best alternative forgone

    Positive statement: Factual statement that can be tested as true or false

    Private benefit: Benefit of an economic activity to a consumer or firm

    Private cost: Cost of an economic activity to a consumer or firm

    Production possibility frontier: Maximum possible combinations of 2 goods/services an economy can achieve when all resources are fully employed

    Renewable resources: Resources that regenerate through natural processes

    Scarcity: Infinite wants and needs but finite resources to satisfy them

    Specialization: Labour allocate all their time to produce a good or service

    Sustainable resource: Resource that are exploited in such a way that it will never run out

    Tradeable Pollution Permits: Permits that allow firms to pollute
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    Yes, they are. There are more than this for Unit 1, eg all of the elasticities.
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    (Original post by mapotts53)
    Yes, they are. There are more than this for Unit 1, eg all of the elasticities.
    Yea, I got it all in my head.

    I just wanted to check these definitions to see if they are correct
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    For external costs I'd say "costs incurred to third parties and society which is not accounted for by the price mechanism from a private market transaction"
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    (Original post by zayn008)
    For external costs I'd say "costs incurred to third parties and society which is not accounted for by the price mechanism from a private market transaction"
    I hope I can remember that
 
 
 
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