Economics Flashcards
Market
A situation where buyers are in contact with potential sellers and there is means of exchange
Scarcity
We have unlimited wants but limited resources. Basic economics problem
Opportunity cost
Is the value of the next best alternative that is forgone whenever a choice is made
Needs
The goods and services that people believe necessities to life
Wants
Goods and services that assist us to enjoy a good standard of living. Things we want rather than need to survive
The three basic economic questions
What to produce
How to produce
And for whom to produce
Consumer sovereignty
When the consumer is in charge when it comes to deciding where resources are allocated in a market economy
Economic resources
The input required by the producer to complete the production process
The law of supply
As the price of an item increases the quantity of the item that is supplied by produces will increase. The more expensive something is the more produces will make
The law of demand
As the price of an item decreases the quantity of the item will be demanded by the market. The cheaper something is the more we will buy
Equilibrium point
We are customer demands equal the supply of goods. Where the demand and supply lines intersect
Excise tax
Is an indirect tax impose on certain negative products. It is paid to the government by the producer but it is passed on to the customer
Stakeholders
Is a group or individual who has an interest in or affected affected by the activities of a business
Unintended consequences
Outcomes that are on intended by an action or decision
Expenditure
The total value of the spending on all goods and services that have been produced
