Econs - 1.1, 1.2, 1.3, 1.4, 2.1, 2.2 Flashcards
1
Q
economic problem
A
how best to allocate scarce resources in order to satisfy people unlimited wants and needs
2
Q
economic agents
A
- individuals who operate in a private and public sector of the economy
3
Q
3 economic agents
A
- individuals / household
- firms
- the government
4
Q
3 basic economy questions
A
- WHAT to produce
- HOW to produce
- WHOM to produce for
5
Q
private sector
A
- economic activity of private individuals and firms
- main aim => earn profit
6
Q
public sector
A
- economic activity directly involving government
- main aim => provide a service
7
Q
goods
A
- physical item
- can be produced, bought and sold
8
Q
services
A
- non-physical items
- can be provided by firms and paid for by customers
9
Q
needs
A
- good and services that are essential for survival
10
Q
want
A
- good and services not necessary for survival
- demanded by economic agents to fulfil their desires
11
Q
economic goods
A
- limited in supply
- come at a cost
12
Q
free goods
A
- unlimited in supply
- no opportunity cost
13
Q
4 factors of production
A
- land
- labour
- capital
- enterprise
14
Q
land
A
- natural resources
- oil, coal, water
15
Q
labour
A
- human resources / efforts
- skilled or unskilled
16
Q
capital
A
- manufactured resources (man-made)
- machinery, tools, vehicles
17
Q
enterprise
A
- skills a business person requires to combine/manage the other 3 factors
18
Q
factors of production - meaning
A
- production of any good or service requiring resources
19
Q
rewards for land
A
- rent
- ownership of property
20
Q
rewards for labour
A
- wages and salaries
- paid to workers for human efforts
21
Q
rewards for capital
A
- interest
- overtime becomes higher
22
Q
rewards for enterprise
A
- profit
- the remaining balance after all business costs
23
Q
geographical mobility
A
- willingness and ability for someone to relocate to another area for employment purposes
24
Q
occupational mobility
A
- the ease with which a person is able to change between jobs
25
reasons why people may not be geographically mobile
- family ties
- costs of living
26
opportunity cost
- next best opportunity forgone when making a decision
27
who does opportunity cost influence
- directly influences decisions made by consumers, workers, producers and governments
28
production possibility curve (PPC)
- represents the maximum combination of goods and services which can be produced in an economy
29
microeconmics
- study of particular sections of the economy
- concerned with decision making by individuals, households and firms
30
macroeconomics
- study of economic behavior and decision making in the whole economy
31
households
- buyers
- consumers, savers and workers
32
firms
- businesses that produce goods and services
- employ workers
33
government
- system that rule the state or country
34
market
- arrangement which brings buyers into contact with sellers
35
resources
- factors used to produce goods and services
36
scarcity
- a situations where there is not enough to satisfy everyone's wants
37
entrepunuer
- a person who bears risks and makes the key decisions in a business
38
on the curve =
inside the curve =
outside the curve =
- efficient
- inefficient
- unachieveable
39
shifts in a PPC
- right = increase / positive
- left = decrease / negative
40
PPC diagram
straight line =
curved line =
- constant opportunity cost
- increasing opportunity cost
