Economic Concepts Flashcards
What are the 3 economic questions?
The 3 economic questions are:
. What to produce? (Allocation of resources)
. How to produce? (Which limited resources to use for which goods)
. For whom to produce? (Sold to either private or public use)
What are the 3 types of resources?
The three types of resources are:
. Land is a natural resource that is apart of the Earth (I.e. Water, trees, forests)
. Labour which is the physical work of a person (i.e. Trade, truck driver, mechanic)
. Capital are the assets owned by an person or organisation in order to speed the production process (i.e. Trucks, bulldozer and lorry)
What is opportunity cost?
Opportunity Cost is the loss of alternatives when one alternative is chosen.
What is the difference between a need and want?
A need is something you have to have and can’t love without. A want is something you would like to have but isn’t a necessity.
What is scarcity?
Scarcity is the state of being scarce or in short supply.
What are Complementary and Substitute Products?
Substitute Products are any products that could be sustained for another product and satisfy the needs of the original product.
Complementary Products is a product that can be purchased with the original product.
What are Economic Resources?
The Economic Resources are the resources of land, labour, capital and enterprise used to produce goods and services.
What is the law of demand?
The law of demand states that, with all factors being equal, that as the price of the products increases, the demand of the product decreases and vice versa.
What is economics?
Economics is the branch of knowledge concerned with production, consumption and transfer of wealth.
What is a market?
A market is a regular gathering of people for the purchase and sale of provisions, livestocks and other commodities.
What is consumer sovereignty?
Consumer sovereignty is the situation in an economy where the desires and needs of consumers control the output of producers.
What are the factors that increase the demand of a product?
. Effective advertising campaign
. Change in weather
. Change in fashion
. Increase in income
. Increase in price of a substitute product
. Decrease in the price of a complementary product
What is the law of supply?
The law of supply that states, when all other factors are equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer increases and vice versa.
What are the factors that increase the supply of a product?
. Availability of resources
. Cost of resources
. Efficiency in resource use
