definitions(micro)

Question 1

define demand

Answer 1

the quantity of a goood or services purchased at a given price over a given time period

Question 2

define supply

Answer 2

the quanitity of a good or service that firms are willing to sell at a given price over a given time period

Question 3

define normative staments

Answer 3

statements that express an opinion about what ought to be, subjective statments that carry value judgments

Question 4

define positive statments

Answer 4

objective statments that can be tested or rejected by reffering to the available evidence

Question 5

define value judgments

Answer 5

a view of the rightnessor wrongness of something, based on a personal view

Question 6

define barter

Answer 6

the practice of exchanging one good or service for another without using money

Question 7

define capital goods

Answer 7

help to aid production of consumer goods in the future

Question 8

define constraints

Answer 8

limits to what consumers can afford

Question 9

Define entrepreneur

Answer 9

an individual who seeks to supply products to a market for a rate of return

Question 10

define factors of production

Answer 10

the resources used to produce goods and services

land, labour, capital, enterprise

Question 11

define the factors of production

Answer 11

• land: natural resources availiable for production
• labour: human input into production process
• capital: goods used in the uspply of other goods
• enterprise: the willingness of people in business to take risks

Question 12

define opprtunity cost

Answer 12

the cost of any choice in terms of the next best forgone alternative

Question 13

define production possibility frontier

Answer 13

shows the maxiumum potential output of a combination of two goods and services an economy can achieve when all of it’s resources are fully and efficently employed, given the current level of technology

Question 14

define consumer goods

Answer 14

goods used to satisfy consumer wants and needs

Question 15

define specialisation

Answer 15

when an individual, firm, region or country concentrates on the production of a limited range of goods and services

Question 16

deine division of labour

Answer 16

the specialisation of workers on specific tasks in the production process

Question 17

Define medium of exchange

Answer 17

something which i s commonly accepted in exchange for goods and services

1 of the functions of money

Question 18

define measure of value

Answer 18

the price of a good revealing it’s value

Question 19

define store of value

Answer 19

value is maintained and can be kept for a long time

Question 20

define method of deffered payment

Answer 20

allows debt to be created

Question 21

Define price mechansism

Answer 21

the system of resouce allocation through the market

Question 22

define command economy

Answer 22

an economy in which resoucres are allocated solely by the state

Question 23

define a mixed economy

Answer 23

an economy in which resoucres are alloctaed by the publi and private sector

Question 24

define a free market economy

Answer 24

an economy in which resources are alloctaed soley by the price mechansim

Question 25

define the public sector

Answer 25

the part of an economy which is controlled or owned by the goverment

Question 26

define the private sector

Answer 26

the part of economy owned or controlled by individuals or groups of individuals who seek to maximise profit or raise awarness

Question 27

define efficency

Answer 27

the optimal production and distribution of scarce resources

Question 28

define ceteris paribus

Answer 28

a principle where the relationship between two variables is isolated, assuming that all other factors are held constant

Question 29

define the economic problem

Answer 29

the problem of scarcity; wants and needs are unlimted but resources are finite so choices must be made

Question 30

define renewable resources

Answer 30

resources which can be replenished; so the stock of resources can be maintained over a period of time

Question 31

define non renewable resources

Answer 31

resources which cannot be readily replenished or replaced at a level equal to consumption; the stock level decreases over time as they are consumed

Question 32

define maximum productive potential

Answer 32

the amount of output an economy could produce if all of its resources were fully and efficently employed

Question 33

define economic growth

Answer 33

an increase in the productive potential of a country - shown by an outward shift of the PPF

Question 34

define utility

Answer 34

a meaure of satisfaction that consumers recieve from purhasing and consuming a good/ service

Question 35

Define subsidies

Answer 35

Money given by the government to encourage production, which is not paid back

Question 36

ad valorem tax

Answer 36

an indirect tax imposed on a good where the valueof the tax is dependant on the value of the good

Question 37

equilibrium price/quantity

Answer 37

demand equals supply so there are no more market forces bringin about chnage to price or quantity demanded

Question 38

excess demand

Answer 38

when the price is set too low so demand is greater than supply

Question 39

excess supply

Answer 39

when price is set too high so supply is greater than demand

Question 40

indircet tax

Answer 40

taxes on expenditure whih increases production costs and lead to a fall in supply

Question 41

specific tax

Answer 41

a tax imposed on a good or sevice where the value of tax is dependant on the quantity bought

parallel line

Question 42

define consumer surplus

Answer 42

the difference between what consumers are willing to pay and what they actually pay.

Question 43

define producer surplus

Answer 43

the extra amount of money paid to producers above what they are willing to accept to supply a good /service