Economics GCSE 2018 Flashcards
What does Scarcity mean?
Resources are limited in supply
What does Trade-off mean?
Where the selection of one choice results in the loss of another
What does Opportunity cost mean?
The loss of the next most desired alternative when choosing a particular course of action
What does Price mean?
The amount of money required to purchase a good or service
What does Revenue mean?
The value of sales in a time period, calculated by price x quantity sold
What does Demand mean?
The quantity of a good or service a consumer would like to buy at a given price in a time period
What does Price insensitivity mean?
Where changing the price of a product by a certain amount leads to a smaller change in demand
What does necessity mean?
A good or service that a consumer views as essential
What does substitute mean?
A good or service which is a possible alternative to another good or service
What does Price sensitivity mean?
Where changing the price by a certain amount results in a bigger change in demand
What is a stakeholder?
Groups which are interested in the performance of a business
What is a shareholder?
The owner of a limited company. They buy shares which represent part ownership of a company
What is competitive commission?
The body which investigates cases where firms merge or are taken over to decide whether such activity is in the public interest. It has the power to prevent mergers or take-overs where these are seen to reduce the level of competition
What is a dividend?
The payments made to shareholders from the profits of a company
When does conflict of interest exist?
When different groups want different things
What does externalities mean?
The effects of an economic decision on individuals and groups outside who are not directly involved on the decision
What is a negative externalitie?
Those costs arising from business activity which are paid by people or organisations outside the firm
What is a positive externalities?
Those benefits arising from business activity which are experienced by people or organisations outside the firm. The firm receives no payment for the benefits received.
What does profit mean?
The rewards for risk-taking. Profit is the difference between the amount of revenue earned by a firm and the total costs of producing the goods and services the business sells
What does market share mean?
The quantity sold by a business as a percentage of total sales in a market
What does competitiveness mean?
The strength of a business position in a market measure by market share and profitability. It reflects whether people are prepared to use the business over it’s rivals.
What does competitive advantage mean?
Advantages that a business has over it’s rivals. These advantages help to win it customers. To be really effective the advantages must be difficult to copy and unique.
What does social success mean?
The performance of a business which takes account of social, environmental and ethical factors
What does marketing mix mean?
The combination of product, promotion,place and price that is designed by a business to achieve its aims.
What is cash flow?
The money coming into and going out of a business over a period of time. This refers to the inflows and outflows of money.
What does productivity measure?
The output of the worker or machine per period of time
What does average cost mean?
The cost of producing each unit of output. This is calculated by dividing total cost by the amount produced.
What does consumer confidence mean?
A measure of the extent to which consumer are prepared to spend money
What does inflation mean?
An increase in the general price level. This is measured by the Consumer Price Index
What is cost of living?
A measure of the average cost of basic necessities, such as food, housing and cooking.
What is external shock?
An unanticipated change in demand or inflation caused by factors beyond the control of the country
What does internal shock mean?
An unanticipated change in demand or inflation caused by factors within the country
What is tax revenue?
Money received by the government from people and businesses paying their taxes
What is exchange rate?
The value of one currency in terms of another
What does Interest rate mean?
The cost of borrowing Money, or the return received on savings
What is economic activity?
The total amount of buying and selling that takes place in an economy over a period of time
What is a monetary policy?
The use of changes in interest rates to control inflation
What is a Fiscal policy?
The use of taxation and government spending to achieve government objectives
What is internal growth?
Occurs when a business increases in size by selling more of its goods or services without taking over or merging with other business
what is external growth?
Where a business grows in size due to merger or takeover
What is an innovation?
The process of transforming an invention into a product that customers will buy. It is the commercial exploitation if an invention
What is a merger?
Where two or more firms agree to join together. This is a voluntary agreement and results in the new businesses retaining the identity if both businesses
What is a takeover?
Where one business buys another business
What is a conglomerate merger?
Occurs when two businesses join which have no common business interests
What is economies of scale?
The factors which cause the average cost of producing something to fall as output rises
What is technical economies of scale?
Reductions in average cost of production sue to the use of more advanced machinery
What is market power?
A measure if the influence of a business over consumers and suppliers
What is bulk buying economies?
Occurs when businesses can gain discounts on large orders from suppliers
What is diseconomies of scale?
The factors which cause average costs of production to increase as output increases
What is a monopoly?
A business which has a market share of 25% and can therefore influence the market. In a pure sense of monopoly exists when there is only one seller.
What is a patent?
A legal protection for a business’s new ideas. This prevents other businesses stealing ideas from other countries.
What is a natural monopoly?
Where one large business can supply the market with products at lower costs than if the market was supplied by many producers
What are regulators?
Independent bodies set up by the government to monitor and regulate business activity
What is self regulation?
Where an industry body made up of representatives from businesses within the industry monitor the actions of members to ensure rules and guidelines are followed
What is a pressure group?
An organisation which aims to influence the decisions of businesses, government and individuals
What does GDP stand for and what does it mean?
Gross domestic product
The total value of output produced in an economy in a year
What is economic growth?
The percentage increase in GDP per year
What is output?
The amount of goods and services produced in a period of time
What is an investment?
Spending on equipment and plant that helps contribute to production
What is human capital investment?
Spending on training and education which allows workers to be able to produce more output in the future
What is physical capital investment?
Spending on new assets such as factories or machinery which allows a firm to produce more output in the future
What is a Grant?
Sums of money provided by the government to encourage a particular project or activity
What is an Infrastructure?
Road, rail and air links that allow people and output to move speedily around a country and which help trade
What is income inequalities?
Where there is a difference in income between different groups of people within a country
What does GDP per capita mean?
The value of output produced by a country in a year divided by the population of that country
What are non renewable resources?
Resources which are limited in supply and will eventually run out
What are renewable resources?
Resources that are not limited in supply and are naturally replaced in the environment
What is corporate social responsibility?
A measure of the impact that a business has on society and the environment as a result of its operations
What is ethical responsibility?
Where a business takes a moral standpoint and ensures that it’s behaviour does not impact stakeholder groups in a negative way
What is taxation?
A payment made to the government by consumers or firms. It is usually based on spending or incomes.
What is a subsidy?
A payment to businesses and other organisations from the government to encourage the production of certain products or to make then cheaper for the Consumer
What is the poverty line?
A level of income usually defined by a government or international body, below which a person would not be able to afford many of the goods and services seen as being the essentials of a decent standard of living
What is a welfare state?
The system of state benefits and free government services paid for through taxation. It aims to reduce inequality between different groups of people in the UK
What is absolute poverty?
Where a person cannot afford the basics of life such as food, shelter and clothes
What is relative poverty?
Where a person has a standard of living well below the average for that country
What does the poverty cycle mean?
Where living in poverty makes it harder for you to escape poverty in the long run
What is a tariff?
A tax which us imposed on goods and services which have been imported from abroad and which has the effect of increasing the price
What is a quota?
A physical limit to the amount of goods and services that can be imported into a country
What is a non tariff barrier?
Any barrier excluding tariffs that are designed to restrict grade and limit the amount of imports entering a country
What is free trade?
The exchange of goods and services between countries where there are no restrictions such as tariffs, quotas or other barriers
What is a single European market?
Where all restrictions to trade including tariffs, quotas and other barriers have been abolished between countries who are members with the EU
What is multinational corporation?
A company that us based in one country but manufacturers and sells products in a variety of other countries
What is international debt?
A sum of money which is owed by the government of an LEDC to richer developed nations or organisations such as the world bank
What is a world bank?
An organisation that provides lones to LEDCs
What is debt relief?
The reduction or cancellation of debt that LEDCs owe to either the world bank or developed nations
What is a non government organisation?
Independent non profit organisations that aim to achieve a particular objective
What is a charity?
organisations that aim to produce a surplus of income over expenses to promote a good cause
What is a world trade organisation?
An organisation that aims to promote international free trade
What does ethically responsible mean?
Where firms act with a moral sense of responsibility towards their stakeholders
