Edexcel A Economics - Theme 1 Flashcards
Barter
swapping one good for another without the use of money
Base period
the period, such as a year or a month, with which all other values in a series are compared
Basic economic problem
resources have to be allocated between competing uses because wants are infinite whilst resources are scarce.
Capital
as a factor of production is the stock of manufactured resources used in the production of goods and services.
Capital goods
goods that are used in the production of other goods such as factories, offices, roads, machines and equipment.
Capital productivity
output per unit of capital employed.
Ceteris Paribus
all things being equal; the assumption that, whilst the effects of a change in one variable are being investigated, all other variables are kept constant.
Choice
economic choices involve the alternate uses of scare resources.
Command economy
an economic system where the government, through a planning process allocates resources in society
Consumer goods
goods and services that are used by people to satisfy their needs and wants.
Economic goods
goods that are scarce because their use has an opportunity cost.
Enterprise
as a factor of production is the seeking out of profitable opportunities for production and take risks in attempting to exploit these
Entrepreneurs
individuals who seek out profitable opportunities for production and take risks in attempting to exploit these
Factors of production
the inputs top the production process: land, labour, capital and enterprise.
Fixed capital
economic resources such as factories and hospitals which are used to transform working capital into goods and services.
Free goods
goods that are unlimited in supply and which therefore have no opportunity cost.
Free market economy
an economic system that resolves the basic economic problems mainly through the market mechanism.
Human capital
the value of the productive potential of an individual or group or workers.
Index number
an indicator showing the relative value of one number to another from a base value of 100.
Labour
as a factor of production is the workforce.
Labour productivity
output per worker
Land
as a factor of production is all natural resources
Law
a theory or model which has been verified by empirical evidence
Margin
a point of possible change