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Micro Economics > Basic Economic Principles And Terms > Flashcards

Basic Economic Principles And Terms Flashcards

1
Q

What is a stakeholder?

A

An individual or group with a particular interest or influence on a particular activity

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2
Q

What are the four main stakeholders

A

Government
Firms
Workers
Consumers

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3
Q

What is GDP?

A

The value of goods and services provided by the economy

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4
Q

What outcomes do the governement want from the economy?

A

Good welfare and high quality of life for their population
Taxes paid honestly
An increasing GDP
Foreign investment

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5
Q

What outcomes do consumers want from the economy?

A

A wide range of products
Low prices and VAT
Readily available goods

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6
Q

What outcomes do workers want from the economy?

A 
Fair working hours
Work-life balance
A variety of oppurtunities such as promotion
A good wage
Lower income taxes
Job security
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7
Q

What outcomes do firms want from the economy?

A 
Cost effective workers to decrease unit costs
Lower coorporation tax
Higher sale revenue
Minimum costs
Maximise profit
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8
Q

What are the factors of production and what do they mean?

A

Land
Labour
Capital
Enterprise

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9
Q

What is land and give examples

A

An area of available natural resources to produce products e.g fertile land, minerals, fish forestry

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10
Q

What is labour and what is the reward for it?

A

People available to work and do tasks, reward is wages

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11
Q

What is capital and what is the reward from it?

A

Capital is the stock of goods to make other goods like machinery. The reward is interest

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12
Q

What is enterprise and what is its reward?

A

Enterprise brings the other factors of production together into a complete production - ‘risk taker’. The reward is profit

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13
Q

What is the reward that comes from land?

A

Rent

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14
Q

How can capital be improved?

A

Technological advances, servicing and looking after equipment

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15
Q

How can enterprise be improved?

A

By having more information to help inform descions

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16
Q

How can we improve the use of land?

A

By using renewable resources like water

17
Q

How can labour be improved so production capacity is increased?

A

Division

Education

18
Q

What is the productive capacity?

A

When the maximum amount of the factors of prosuction are combined in their most efficient way

19
Q

What is oppurtunity cost?

A

The next best alternative lost as a result of a person / group of people taking their first choice option

20
Q

What are economic goods?

A

Goods which are scarce and therefore have an oppurtunity cost

21
Q

What are free goods?

A

Goods which have no oppurtunity cost

22
Q

What are capital goods?

A

Business goods which produce other goods and services

23
Q

What are consumer goods?

A

Goods which are used up

24
Q

What is economics?

A

The study of production, distribution and consumption of wealth in human society

25
Q

What are the three aspects of the economic problem?

A

Limited/scarce resources
Production
Unlimited wants and needs

26
Q

What is a PPF?

A

A production possibility frontier

27
Q

How does a PPF demonstrate oppurtunity cost?

A

It compares the production of two products at their maximums.
It allows you to see what is lost somewhere else on the curve

28
Q

In a curved PPF, why doesn’t the oppurtunity cost remain the same along the curve?

A

Because the production of two products aren’t identical

And not all inputs are equally suited

29
Q

When might PPFs shift outwards?

A

If population increases
Employment rate increases
Technology advances

30
Q

When might PPFs shift inwards?

A

Population decrease

31
Q

Which exonomic concepts can the PPF model illustrate?

A

Oppurtunity cost
Workforce
Factors of production

32
Q

What does reallocating scarce resources from ome product to another involve?

A

An opportunity cost

33
Q

What allows countries to consume beyond their own PPF?

A

Trade

34
Q

If both goods in a PPF were produced more, what would this represent?

A

An improvement in welfare

A gain in allocative efficiency

Micro Economics (12 decks)

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