CEP Chain (Week 1) Flashcards
What are the 4 factors of production (CEP)
Land, labour, capital, enterprise
What are the three outputs (CEP)
Goods, services, waste
What are the two efficiencies
Productive and allocative
What are the 5 types of goods (scarcity)
Consumer, capital, free, private, public
What are capital goods (scarcity)
Used to make other things eg machines
What are the two types of consumer goods (scarcity)
Consumable and durable
What are the features of free goods (scarcity)
Not scarce, no opportunity cost
What is the order of the CEP chain
CEP, scarcity, choice, decision, opportunity cost
What are the three economies in the econ system? (Choice)
Command economy, mixed economy, free markets economy
What is command/planned economy (choice)
Government make decisions on the questions (eg south korea)
What is a free markets economy (choice)
No government decision (the market decides) eg america
What is a mixed economy (choice)
A mix of command and free markets economy (eg most countries)
What are the questions that need to be decided in the economy (choice)
How, what and for whom
What do the ‘how, what and for whom’ questions decide (choice)
Productive efficiency
What does allocative efficiency state
If there is a high price, the demand is low and supply is high; if the price is low, the demand is high and supply is low. Perfect is in the middle.
