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Economics > Definitions > Flashcards

Definitions Flashcards

1
Q

Consumer

A

A person or organisation that directly uses a good or service

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2
Q

Producers

A

A person, company or country that makes, grows or supplies goods or services

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3
Q

Government

A

A political authority that decides how a country is run and manages its operations

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4
Q

Factors of production

A

The resources in an economy that can be used to make goods and services. Capital, Enterprise, Land and Labour

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5
Q

Scarce resources

A

When there is an insufficient amount of something to satisfy all wants

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6
Q

Unlimited wants

A

The infinite desire for something

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7
Q

Economic problem

A

How to best resources to fit the unlimited wants of people

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8
Q

Opportunity cost

A

The next best alternative when making a choice

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9
Q

Economic choices

A

An option for the use of scarce resources

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10
Q

Economic sustainability

A

The best use of resources in order to create responsible development or growth, now and for the future

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11
Q

Social sustainability

A

The impact of development or growth that promises an improvement in the quality of life for all, now and into the future

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12
Q

Environmental sustainability

A

The impact of development or growth where the effect on the environment is small and possible to manage, now and into the future

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13
Q

Market

A

A way of bringing buyers and sells to buy and sell goods and services

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14
Q

Primary sector

A

The direct use of natural resources, such as the extraction of basic materials and goods from land and sea

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15
Q

Secondary sector

A

All activities in an economy that are concerned with either manufacturing or construction

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16
Q

Tertiary sector

A

All activities in an economy that are involved in a service

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17
Q

Goods

A

A tangible product

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18
Q

Services

A

An intangible product

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19
Q

Factor market

A

Market in which the services of the factors of production are bought and sold

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20
Q

Product market

A

Market in which the final goods or services are offered to consumers, businesses and the public sector

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21
Q

Specialisation

A

The process by which individuals, firms, regions and whole economies concentrate on producing those products that they are best at producing

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22
Q

Exchange

A

The giving up of something that the individual or firm has, in return for something they wish to have but do not possess

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23
Q

Demand

A

The willingness and ability to purchase a good or service at the given price in a given period of time

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24
Q

Demand curve

A

A line which represents the amount of a good or service a consumer is willing and able to buy. There is a negative relationship between price and quantity

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25
Q

Price elasticity of demand

A

The responsiveness of quantity demanded to a change in the price of the product

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26
Q

Supply

A

The willingness and ability to produce a good or service at the given price in a given period of time

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27
Q

Supply curve

A

A line which represents the amount of a good or service a firm is willing and able to produce. There is a positive relationship between price and quantity

28
Q

Price elasticity of supply

A

The responsiveness of quantity supplied to a change in the price of the product

29
Q

Price

A

The sum of money you have to pay for a good or service. It is determined by the interaction of supply and demand

30
Q

Equilibrium price

A

The price where the quantity supplied exactly matches the quantity demanded

31
Q

Equilibrium quantity

A

The output level where the quantity supplied exactly matches the quantity demanded

32
Q

Determination of price

A

The interaction of the free market forces of demand and supply to establish the eternal level of price for a good or service

33
Q

Allocation of resources

A

How scarce resources are distributed among producers and how scarce goods and services are allocated among consumers

34
Q

Market forces

A

Factors that determine price level and the availability of goods and services in an economy without government intervention

35
Q

Competition

A

Where different firms are trying to sell a similar product to a consumer

36
Q

Market economy

A

An economy in which scarce resources are allocated by the market forces of supply and demand

37
Q

Monopoly

A

A sole producer of a good or service

38
Q

Oligopoly

A

Where a small number of firms control the large majority market share

39
Q

Competitive market

A

A market where there are lots of sellers, selling identical products

40
Q

Production

A

The total output of goods and services produced by a firm or industry in a time period

41
Q

Productivity

A

One measure of the degree of efficiency in the use of factors of production in the production process. It is measured in terms of output per unit of input

42
Q

Total cost

A

All the costs of a firm added together

43
Q

Average costs

A

The cost of producing a unit

44
Q

Total revenue

A

The total income of a firm from the sale of its goods and services (price x number sold)

45
Q

Average revenue

A

The revenue per unit sold (total revenue / number sold). Equal to the price.

46
Q

Profit

A

When a firms revenue is greater than its costs TR > TC

47
Q

Loss

A

When a firms costs are greater than its revenue TR

48
Q

Fixed costs

A

Costs which do not vary with output - for example, rent.

49
Q

Variable costs

A

Costs which do vary with output - for example, rent.

50
Q

Economies of scale

A

The cost advantages a firm can gain by increasing the scale of production leading to a fall in average costs

51
Q

Labour market

A

Where workers sell their labour and employers buy the labour: it consists of households’ supply of labour and firms’ demand for labour

52
Q

Gross pay

A

The amount of money that an employee earns before any deductions are made

53
Q

Net pay

A

The amount of money that an employee is left with after deductions are made from the gross income

54
Q

Income tax

A

A tax levied directly on a persons income/wages

55
Q

National insurance

A

A contribution paid by workers, and their employers, towards the cost of state benefits

56
Q

Pension

A

A regular payment to people of retirement age. A contribution is deducted from gross salary each month towards this

57
Q

Money

A

Anything that is generally accepted as a means of payment for goods and services

58
Q

Medium of exchange

A

Anything that sets the standard of value of goods or services acceptable to all parties involved in a transaction

59
Q

Financial sector

A

Consists of financial organisations and their products, and involves the flow of capital

60
Q

Banks

A

Financial institutions licensed to take deposits and make loans

61
Q

Building societies

A

A mutual financial organisation that is owed by its members

62
Q

Insurance

A

Financial institution that guarantees compensation for specified loss, damage, illness or death in return for an agreed

63
Q

Interest rates

A

The cost of borrowing money (paid to the lender) and the reward for saving

64
Q

Saving

A

Part of an individual’s income which is not spent on consuming goods and services

65
Q

Borrowing

A

Receiving money in exchange for an agreement to pay it back in the future.

66
Q

Investment

A

The purchase of capital goods that are used to produce future goods and services. It is also an asset purchased to provide an income in the future and/or to be sold at a profit.

Economics (10 decks)

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