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Economics > Basics > Flashcards

Basics Flashcards

1
Q

Enterprise

A

The ability to take risks and run a business venture.
Individual benefits from profit.

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2
Q

Customer

A

An individual consumer organisation that purchases goods or services from a business.

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3
Q

Consumer

A

An individual who is willing and able to purchase goods and services for personal use

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4
Q

Consumer good

A

The physical and tangible goods sold to consumers that are not intended for resale.

These include durable consumer goods, such as cars and washing machines, and non durable consumer goods, such as food, drinks and sweets, that can be used only once.

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5
Q

Consumer services

A

The non-tangible products sold to consumers that are not intended fir resale.
e.g. hotel accommodation, insurance services, train journeys

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6
Q

Factors of production

A

The resources needed by business to produce goods or services.

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7
Q

Name the factors of production and their rewards

A

Land - Rent
Labour - Wages
Capital - Interest
Enterprise - Profit

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8
Q

Capital goods

A

the physical goods used by industry to aid in the production of other goods and services, such as machines and commercial vehicles.

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9
Q

Enterprise

A

the action of showing initiative to take the risk to set up a business.

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10
Q

Land

A

refers to all the natural resources used in the production of goods and services

e.g. earth, lakes, rivers, forests

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11
Q

Labour

A

is the mental / physical effort people provide used in the production of goods and services

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12
Q

Capital

A

a human made good to produce other goods or services

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13
Q

Capital

A

a human made good to produce other goods or services

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14
Q

Rent

A

Owners of land require the payment of rent to supply these resources to people / organizations.

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15
Q

Interest

A

People and organizations that invest capital in firm receive interest.

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16
Q

Wages

A

People will supply their labour to firms in return for wages (payments)

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17
Q

Profit

A

A surplus of revenue from the sale of outputs over the cost of their production

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18
Q

Finite

A

Limited in supply

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19
Q

Economic problem

A

Scarcity of resources relative to unlimited human wants

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20
Q

Free goods

A

Are without limit.

Not possible to make a profit from free goods due to their abundance.

They can be consumed by many people at the same time, and without reducing the amount available to others.
(sunlight, air)

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21
Q

Economic goods

A

Are limited in supply.

People are therefore willing to pay to obtain these goods.

Due to their value, producers will attempt to supply them in order it make a profit.

e.g. oil, corn, gold, watches, bicycles

22
Q

Consumption

A

The using up of goods and services to satisfy human wants and needs

23
Q

Inputs

A

Resources, factors of production

24
Q

Outputs

A

Products, goods and services

25
Q

Factor mobility

A

The ability or ease with which factors of production can be moved or reallocated between different productive uses without incurring significant costs or a loss of output.

26
Q

Occupational mobility

A

Ability to move factors of production between different productive tasks

(Capable of changing use)

27
Q

Geographical mobility

A

Ability to move different factors of production to different locations

(Capable of moving from one location to another)

28
Q

Factors of production may be moved

A

• within a firm
• between firms
• between industries
• between different countries

29
Q

Opportunity cost

A

The benefit forgone by giving up the next best alternative use of scarce resources

Choosing one use of resources always means going without another

30
Q

Production possibility curve

A

PPC

A PPC of a firm shows the maximum possible output combinations of two goods or services that it can produce with a given set of inputs consisting of factors of production.

31
Q

Inefficiency (PPC)

A

Any point inside the curve.

Producing less than it can potentially do.

32
Q

Unattainable (PPC)

A

Any point outside the curve.

Beyond the scope of the economy‘s existing resources.

33
Q

Microeconomics

A

The study of market structure and the behaviour of individual producers and consumers

(individual markets)

34
Q

Macroeconomics

A

The study of how a national economy works

35
Q

3 questions every economy has to solve

A

• what to produce?
• who to produce it for?
• how to produce?

36
Q

Economic system

A

How an economy allocates resources to competing productive activities and assigns the outputs or products of these activities to different consumers.,

37
Q

Market economic system

A

An economic system in which decisions about how resources are used, what goods and services they produce and how they are allocated, are taken by private sector firms and consumers.

38
Q

Planned economic system

A

An economic system in which the government determines what goods and services to produce, their prices and how they are allocated.

39
Q

Mixed economic systems

A

A mixed economic system combines government planning and ownership of resources with the use of the free market economic system to determine the allocation of resources in the economy, that is what is produced, how and for whom.

40
Q

Market

A

Any set of arrangements that allows producers and consumers to exchange goods and services.

41
Q

Needs

A

Essential to human life e.g. shelter, food, clothing

42
Q

Wants

A

Non-essential desires e.g. better housing, a yacht etc.

43
Q

Due to scarcity, choices have to be made by…

A

Producers
Consumers
Workers
Governments
..about the most efficient use of these resources.

44
Q

Resources

A

are the inputs required fir the production of goods and services

45
Q

Economy

A

An area where people and firms produce, trade and consume goods and services.

(within town, country, globe)

46
Q

Substitute goods

A

two alternative goods that can be used fir the same purpose

• they present the costumer with alternative choices

47
Q

Substitute goods

A

two alternative goods that can be used fir the same purpose

• they present the costumer with alternative choices

48
Q

Complementary goods

A

goods that are consumed together

49
Q

Demand

A

all else being equal, as the price of a good increases, quantity demanded decreases; conversely
as the price of a good decreases, quantity demanded increases

50
Q

Extension in demand

A

as the price of a product falls, quantity demanded rises/ extends

51
Q

Contradiction in demand

A

as the price of a product increases, quantity demanded falls or contracts

Economics (2 decks)

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