Microeconomic and Environmental Policies (HSC SSCE Economics): Flashcards
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Microeconomic policies
Microeconomic policies
Govt interventions to improve efficiency of firms & industries
Supply-side economics focus
Supply-side economics focus
Improving production capabilities, not managing demand
Effect of microeconomic reforms on aggregate supply
Effect of microeconomic reforms on aggregate supply
Shifts AS curve rightward
Product markets
Product markets
Markets for goods and services that consumers buy
Factor markets
Factor markets
Markets for inputs used in production (labour, capital)
Allocative efficiency
Allocative efficiency
Resources shift to where they are most valued
Technical efficiency
Technical efficiency
Maximum output from given quantity of inputs
Dynamic efficiency
Dynamic efficiency
Ability to shift resources between industries quickly
Structural change
Structural change
Shifts in production pattern due to tech, preferences, etc.
Two outcomes of successful microeconomic reform
Two outcomes of successful microeconomic reform
Higher output and lower prices