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Economics > Basic Economics > Flashcards

Basic Economics Flashcards

1
Q

Define wants

A

Wants are goods and services that are not necessary but are things we desire or wish for.

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2
Q

Define needs

A

Needs are goods and services that are necessary in life, like water, food, shelter, etc…

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3
Q

Define resources

A

Resources are items used in the production of goods and services

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4
Q

State the four types of resources

A

Land

Labour

Capital

Enterprise

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5
Q

What is Land and give examples.

LLEC

A

Land are items that are natural resources used in the production of goods and services

Eg. Sun, coal and wind etc…

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6
Q

What is labour and give examples.

LLEC

A

Human effort (physical and mental) that goes into producing goods and services

Eg. Teachers, builders

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7
Q

What is capital and give examples.

LLEC

A

Man-made items used by workers in the production of goods and services.

Eg. Hammer, spanner etc…

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8
Q

What is enterprise and give examples.

LLEC

A

Also called entrepreneurs. The ability to combine the other 3 resources to produce goods and services. They manage and coordinate the business.

Eg. Bill gates, and Richard Branson

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9
Q

Define opportunity cost

A

Opportunity cost is the real cost of the next best alternative foregone

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10
Q

Define economic system

A

A system for managing resources in an economy

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11
Q

Define economics

A

Economics is concerned with the way society chooses and allocates its limited resources which have a alternative uses to produce goods and services to satisfy the infinite present and future needs and wants.

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12
Q

What is the economic problem?

A

Unlimited wants

Limited resources

Producers Consumers Government

Choices

Sacrifice

4 economic questions FWHH

For whom to produce for, what to produce, how to produce, how much to produce

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13
Q

What are the four economic questions?

WFHH

A

For whom to produce for?

What to produce?

How to produce?

How much to produce?

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14
Q

PPF MODEL

what is the letter below the line?

A

It is the waste of resources due to unemployment

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15
Q

PPF MODEL

what is the letter above the line?

A

resources that have been left unattainable due to the current fixed level of resources and technology

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16
Q

Who controls a market economic system

A
  • no government intervention

- consumers and producers answer the four economic questions

17
Q

What are the 4 key features of a market economy system?

A

Businesses focus on maximising profit

Competition

Leads to innovation

Public education and healthcare does not exist

18
Q

Who controls a planned economic systems?

A
  • The government owns all resources

- Government answers the 4 economic question

19
Q

What are the 4 key features of a planned economy?

A

Aim for equality

Lack of choice, innovation, competition, efficiency

Stable

Everyone has a job, but doesn’t get to choose it

20
Q

Who controls a mixed economy?

A

Contains elements of a market and planned economy

Production decision are mostly made by Private companies

21
Q

What are 2 key features of a mixed economy?

A

Prices are determined by supply and demand

Government interference in the economy is fairly limited. But the government provides collective goods and services such as education, roads, schools etc..

22
Q

Why is the role of the government in a mixed economy important?

  • 4 points
A

Collects tax

Set a minimum wage

Rules and relegation

Equal access

23
Q

Why is it important for the government to Collect tax

A

To provide goods and services to the community

24
Q

Why does the government seta minimum wage?

A

So people get what they work for and they don’t get cheated

25
Q

Why does the government set rules and regulations?

A

To set what is legal and illegal, so their isn’t chaos

26
Q

What does the government give equal access to the community?

A

For equal opportunities and priveledges for everyone

27
Q

Define scarcity

A

A shortage in supply of resources

Economics (4 decks)

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