General Knowledge Flashcards
What are the main factors of production?
Land, Labour, Capital and the Entrepreneur
What is demand?
Demand is defined as the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period. e.g to be a part of demand a consumer must put their money on the table to support their expressed desire for a good or service.
What is supply?
Supply is defined as the quantity of a good or service that producers are willing and able to supply at a given price in a given time period. i.e. to be part of supply a producer must put their “Good on the table” for the stated price.
Factors that shift demand
Advertising, Education, Prices of related goods, Seasonal.
Factors that shift supply
A decrease in costs of production, The profitability of alternative products, weather, Lower taxes, Subsidies.
What is Average fixed cost?
Fixed cost per unit of output
What is Average variable cost?
Variable cost per unit of output
What is Marginal Cost?
The extra cost of producing one more unit of output.
What is Total cost?
fixed costs + variable costs
What is Variable cost?
Costs which increase as output increases, Raw material, labour costs.
What are fixed costs?
Costs which have to be paid before production begins.
How to calculate:
Average variable cost
Marginal Cost
Variable cost
Total cost
Total Cost Formula = Total Fixed Costs + (Average Variable Cost x Total Units)
Variable Costs = Cost Per Unit x Total Number of Units.
