Definitions Test- October/november 2022 Flashcards
Land
The resource that encompases the natural resources used
Eg. Geographical land, forests
Labour
-the human input into the production process
capital goods
Man-made goods which are used in further production of wealth through manufacturing more goods or services (eg. Machinery)
Enterprise
-willingness of an idividual or organisation to take risks
eg. Through setting up a new business or inventing a new product
Consumer goods
Goods which satisfy our- the counser’s- wants directly
Production possibility frontier
- a curve on a graph which shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed
Opportunity cost
Benefit lost from the next forgone alternative
Demand
The quantity/amount of a good/service that an individual is able and willing to purchase at a given price, over a given period of time
Supply
The quantity/amount of a good/service that a producer is willing and able to sell at over a given period of time, at a given price
Derived demand
-when ademand for a good or service, which is a consequence of the demand for something else
-eg. Wheat needed to make wheatabix
Joint demand
The demand for one product is directly and positively related to market demand or a related good or service
competitive demand
When substitute goods or services are available that compete, for demand, eg. Price of one good increases resulting in an increase in demand of another good
Composite demand
When goods or services have more than one use
The increase in demand for one product leads to a decrease in supply of the other
Joint supply
When an increase in supply of one good necessarily increases the supply of another
Consumer surplus
The difference between what the consumer is willing to pay and the actual market price for a good/service
Producer surplus
The difference between what a producer is willing to supply at and the actual market price of a good/service
PED
-price elasticity of demand
-a measurement of the proportionate responsiveness of demand to a change in price
elastic
When an increase in price of a good/service causes a more than proportionate increase in demand
Inelastic
-when an increase in the price of a good/service causes a less than proportionate increase in demand
PES
Price elasticity of supply
measures the responsiveness to the supply of a good or service after a change in its market price
