economics Flashcards
what is economics?
economics is the study of decisions, outcomes and activity that occur due to the scarcity of resources. Its the study of how society uses its limited wants to satisfy unlimited needs and wants.
What is a Market?
a market is any situation which potential buyers have potential sellers and there is means of exchange. There is a way of paying for the goods and services traded.
What are goods?
goods are physical objects that command a price in the market. A good is a tangible item that is transferable by consumers.
What are Services?
services are activities that cant be touched, are intangible and are not transferrable by consumers.
Why would the government intervene in a Market?
- to stabilise the economy
- to reallocate resources
- to redistribute income
What is the law of demand?
the demand curve shows the quantity of goods which people want at different prices. When the price decreases, the level of demand increases.
What is the Law of Supply?
the law of supply states that if that if the price of the product rises and nothing else changes, producers are able to increase the amount of the product they offer to the market
What does enterprise mean?
enterprise is the specific skill used by people. This is when a person uses initiative to create something
What is capitol?
capitol is all equipment (machinery, buildings and infrastructure) used by human labour in the process of production.
What is Labor?
Human resources describe the human work effort, both physical and mental, used in the production of goods and services.
What is Land?
Natural resources are useful raw materials that we get from the Earth. They occur naturally, meaning humans cannot make them. Instead, humans can use and modify natural resources in ways that are beneficial
What is opportunity cost?
Opportunity Cost is the value of the next best alternative that is forgone whenever a choice is made. Its what you do not get after picking something over it.
What is the economic problem
The economic problem is the idea where we have limited resources to satisfy our unlimited wants.
What are needs?
The goods and services that people believe are necessities of life and include food, clothing, water, health care and shelter.
What are wants?
Goods and services that assist us to enjoy a good standard of living e.g. Mobile phones, Cars, Television. They are things we want rather than things we need to survive.
