introduction to economics Flashcards
what are the main economic groups
consumers, producers and government
what do the economic groups do?
impact the economy through buying, producing or intervening in markets
consumer
a person or organisation that directly uses a good or service
producer
a person, company or country that makes, grows or supplies goods and/or services
government
a political authority that decides how a country is run and manages its operation
good
a tangible product, i.e. one that can be seen or touched
service
an intangible product, i.e. one that cannot be seen or touched
what are consumers influenced by and why
they are influenced by how much benefit they will gain from a good which helps them put a price on how much they value it. to make this decision, they need to have information about the good available and be able to understand it.
what are producers influenced by and why
they are influenced by how much benefit they receive from a good, a benefit is PROFIT. to maximise profit, suppliers choose what and how they produce. this affects the quantity, price and quality of goods.
what are government influenced by and why
they’re influenced by wanting what’s best for society. they can also impact the WHOLE economy by its policies, like benefits and taxes. Governments spend money in the economy too by providing services like healthcare.
profit
the amount of money a producer has left after all costs have been paid
circular flow of income
what is the interdependence between customers, producers and government?
factors of production
the resources in an economy that can be used to make goods and services, eg, capital, enterprise, and and labour
land
the factor of production concerned with the natural resources of an economy SUCH AS farmland and mineral deposits
