1.1 Economic Methodology and the Economic Problem Flashcards
1
Q
- Nature and Purpose of Economic Activity
A
- Needs
- Wants
- Economic Welfare
2
Q
- Economic Resources
A
- Production
- Capital Good
- Consumer Good
- Factors of Production
- Cost of Production
- Environment as a Scarce Resources
3
Q
- Scarcity, Choice and the Allocation of Resources
A
- Economic Problem
- Scarcity
- Opportunity Cost
4
Q
- PPF
A
- Productive Efficiency
2. Allocatively Efficiency
5
Q
1.1 Need
A
- Something that is necessary for human survival
- E.g. Food, warmth or shelter
6
Q
1.2 Want
A
- Something that is desirable
- E.g. fashionable clothing
7
Q
1.3 Economic Welfare
A
- Economic well being
8
Q
2.1 Production
A
- Process of converting inputs into outputs of goods
9
Q
2.2 Capital Goods
A
- A good which is used in the production of other goods or services.
10
Q
2.3 Consumer Goods
A
- Consumed by individuals to satisfy their needs / wants
11
Q
2.4 Factors of Production
A
- Inputs into the production process
- Land, Labour, Capital, Enterprise
12
Q
2.5 Cost of Production
A
- Cost of employing land, labour and capital together with entrepreneurs own services.
13
Q
2.6 Environment as a Scarce Resource
A
- Physical Resources: soil, water, forests and fisheries
- Gases: such as hydrogen and oxygen
- Abstract Resources: solar energy / wind energy
14
Q
3.1 Economic Problem
A
- How best to make decisions about the allocation of scarce resources to maximise economic welfare.
15
Q
3.2 Scarcity
A
- Results from people having unlimited wants but resources to meet these wants are limited
