Economics Test Flashcards
Define income
Money received, especially on a regular basis for work or through investment
What are the functions of money
Medium of exchange
Measure of value
standard of deferred payment
store of value
What is an economy
The organization of a society where goods and services are produced and consumed.
Income tax
An amount of money payed to the government by an individual depending on the amount of income they receive in the financial year.
Define currency
A system of money in general use of a particular country.
What is Economics
Economics is the social science that describes the factors that determine the production, distribution and consumption of goods and services.
What is a Need
Needs refer to those things that a necessary for survival.
Food\water\clothing\shelter
What is a Want
Wants refer to all the material things we wish to have to make our lives more enjoyable or comfortable.
What is a Recurrent want
wants that occur repeatedly
What is a Complementary want
Two wants that pair together, like a car and petrol
What is a Unlimited Want
Wants that we keep on desiring, like a phone or laptop
What is a changeable want
A want that changes over time, like the style of clothing we would want to wear.
Things that influence our wants
- Age -Culture
- Income -Values and Attitudes
- Environment - Fashion and taste
Define Resources
Resources are anything that can be used in the production process to create goods and services.
What is a Collective want
Collective wants are wants that is desired by the whole community, These wants are known as public goods and services. the government provides for these wants by using the money gained from taxation.
What does it mean when a resource is exhaustible
When a resource is exhaustible, it is limited in its supply and cannot be replaced; it will eventually run out.
What does it mean when a resource is renewable
When a resource is renewable, it is available as long as they are not abused or overused.
What is an Enterprise
An enterprise is a business or company
what is an Entrepreneur
An Entrepreneur is a person with the skills to create economic opportunities, to produce a product that satisfy needs and wants.
Define Capital
Capital refers to the other goods or products we use in assets to mass produce or help produce more goods and services that are purchased by consumers
What is Economic scarcity
It is the fundamental problem of having unlimited wants, but a limited amount of resources to fulfill every want and need.
What are the four Economic questions
- What to produce
- How to produce it
- How much to produce
- Who to produce it for
What is a Durable good
Durable goods are goods that last a long time, such as television sets, cars or computers.
What is a non-durable good
Non-durable goods do not last for a long time or are consumed quickly such as food, petrol, cosmetics and laundry products.
What is a tradition economy
A economy based on allocation of resources through inheritance and rituals
What is a Command economy
A economy where the government controls factors of production.
What is a Market Economy
An Economy where decisions about production is driven by business and consumers or “the market”
What is a Mixed economy
A Economy which contains both privately owned enterprises or combines elements of a market economy and command economy.
What is Gross domestic product
GPD is the most common determinant of a nations economic performance and measures the total value of all goods and services produced in a year.
What is the business cycle
a cycle or series of cycles of economic expansion and contraction.
What is a Peak or Boom in the economic cycle.
A peak is when the economy is producing at its full capacity with high GDP and unemployment is at its lowest.
What is contraction in the economic cycle
Contraction is when GDP declines as consumers reduce their spending due to their lack of confidence in the economy
What is a Recession
Recession is the lowest point of the business cycle, production output is below capacity, causing prices to fall, and unemployment levels to rise.
What is Expansion
Expansion is when consumers and business spending rises, causing GDP to increase and unemployment levels to decrease.
Things that cause a shift in the supply curve
- a change in the cost of resources
- technological changes
- Natural disasters and other events
- government actions
- number of suppliers or markets
- seasonal conditions
What is market Equilibrium
the point of intersection of the demand and supply curves; at this point or price, the quantity demanded equals the quantity supplied and there is no shortage or excess of a product.
What is the Law of supply
It states the higher the price of a product, the more suppliers will provide and vise versa.
What is the Law of Demand
It states that as the price of a product rises, the quantity demanded will fall, and vise versa.
What is Elasticity
The responsiveness of the quantity demanded or supplied to a change in price or, put simply, how much the quantity changes when the prices changes.
What is a economic bubble
a market event in which the prices of an item is traded up an exceedingly high level which quickly collapses.
What is unemployment
A situation that arises when those who are willing and able to work cannot secure a job.
What are the different types of unemployment
- Structural unemployment
- Cynical unemployment
- Frictional unemployment
- Seasonal unemployment
- long term unemployment
- Hardcore unemployment
Define Globalization
The process of increasing economic interactions of economies around the world by removing trade restrictions and improving transportation and technology.
What is Fair trade
Fair trade is the approach to trading which aims to ensure that manufacturers, farmers and workers in poor countries get a fair deal. This includes a fair price for good s and services, decent working conditions and a commitment from buyers so there is reasonable security for the producers.
