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Key terms Flashcards

1
Q

Allocation of resources

A

The uses to which the factors of production are put

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2
Q

Allocative efficiency

A

The state of the economy in which supply is in accordance with consumer preferences

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3
Q

Basic needs

A

The five things essential to human survival: Food, drink, clothes, shelter, warmth

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4
Q

Capital

A

The factor of production that represents all machinery and tools

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5
Q

Commodities

A

Raw materials and agricultural products that can be bought or sold

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6
Q

Commodity Markets

A

where buyers and sellers of commodities trade and set the prices for these products

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7
Q

Consumers

A

The people who use a good or service that has been bought from a business

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8
Q

Consumer goods

A

Goods that are made to be used by the final consumer

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9
Q

Consumption

A

The act of using a product

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10
Q

Customer

A

Any person or business that buys goods or services from a business

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11
Q

Economic agent

A

The people or groups that make key decisions with in an economy

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12
Q

Economic goods

A

Goods and services, made from economic resources, that have opportunity costs

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13
Q

Economic Problem

A

There are unlimited wants but limited resources with which to satisfy them

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14
Q

Economic Resources

A

Factors of production used in the production of goods and services that which have an opportunity cost.

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15
Q

Enterprise

A

The factor of production that organises all the other factors of production

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16
Q

Equilibrium

A

The state of the economy in which demand is equal to supply so there is no incentive to change

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17
Q

Factors of Production

A

The scarce resources used in the production of goods and services: Land, Labour, capital and enterprise

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18
Q

Invisible Hand

A

The processes of supply and demand that allocate scarce resources automatically.

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19
Q

Labour

A

The factor of production that represents the physical and mental effort put into to producing a good or service

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20
Q

Land

A

The factor of production that represents all raw materials used in the production process

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21
Q

Macro economics

A

The part of economics concerned with the economy as a whole

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22
Q

Manufacturing

A

The process of making a good. Turning raw materials into something that can resold

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23
Q

Marginal rate of subsitution

A

The speed as witch a consumer can exchange some of one good for another whilst maintaining the same output

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24
Q

Micro economics

A

The part of economics concerned with the study of the individual consumers and firms

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25
Model
A scientific simplification of the way in which something works in order to study how it works
26
Normative economics
The part of economics concerned with opinions and value judgements
27
Opportunity cost
The alternative that is given up when choosing one thing instead of another
28
Positive economics
The part of economics that is concerned with facts and statements that can be proved to be true
29
Primary production
Getting raw materials, such as oil, fish or coals, from the land or sea. Or using the earth to grow things such as crops or trees.
30
Privately provided Goods
Goods or services that are manufactured and supplied by firms which are not owned by the government
31
Production Possibility
The maximum output that can be produced from a given set of scarce resources, which have been used as efficiently as possible.
32
Production possibility curve
A graphical representation of all the possible combinations of goods and services that can be produced by using all of the available goods and services as efficiently as possible
33
Productive efficiency
Producing a good or service for the minimum average unit cost
34
Products
Any goods or services
35
Publicly provided goods
Products which are created and sold by the government
36
Relative needs
Products that become necessary to survive within the society in which you live
37
Scarcity
The existence of only a limited quantity of something
38
Scientific Method
The process of investigating something in a systematic way. It involves observation, measurement, and experiments and the formulation, testing and modification of a hypotheses
39
Secondary production
Processing raw materials into finished goods
40
Tertiary Production
Providing a service to any branch of industry or consumers
41
Wants
Desires to obtain a good or service that you do not have
42
A Market
Any way of putting buyers and sellers in touch so they can exchange goods or services
43
Complements
Products that are often bought together as they work well together so are often consumed together e.g bread and butter
44
Composite Demand
When goods or services have more than one use. So an increase in the demand for one leads to a decrease in the supply of another.
45
Consumer surplus
The difference between what the consumers would be prepared to pay for a product and the price they actually pay. Its a measure of the extra benefit the consumers receive
46
Contraction
A leftward movement along a demand or supply curve
47
Cross elasticity of demand
The measure of responsivenss of the demand for one product in response to a change in price of another product
48
Demand
The amount of goods and services people are willing to buy at a given price over a given period of time.
49
Disequilibrium
Where the forces of supply and demand are not balanced causing incentive to change
50
Derived Demand
Where the demand for one product is created because it is required to satisfy the demand for another
51
Excess
Where there is a surplus of something
52
Extension
A movement to the right along a supply or demand curve
53
Giffen good
A product with a demand curve that's upwards sloping left to right. Because the effect of a price increase reducing real income means that consumers buy fewer other products in order to buy the more expensive one or in order to be able to buy their necessities.
54
Incentives
A situation where there is a force influencing an economic agent to make a decision in a certain way
55
Incentivising
An action that creates a force influencing an economic agent to make a decision in a specific way
56
Income elasticity of demand
A measure of the responsiveness of consumer demand in response to a change in income
57
Inferior goods
Products for which the demand increases as price increases
58
Joint Demand
Products that are demanded together because they are both needed to provide the benefit to the consumer
59
Jointly supplied goods
Products that are supplied at the same time, usually because one is a by product of the other one
60
Luxury goods
Products who's demand increases by a relatively large amount as income increases
61
Market segment
Groups of consumers within a market that have similar wants or desires
62
Market share
The proportion of the total sales of a market that a product - or business - holds
63
Market stability
A measure of how quickly and how regularly prices and output in a market change. Where changes are slow and infrequent a market is said to be stable
63
Market stability
A measure of how quickly and how regularly prices and output in a market change. Where changes are slow and infrequent a market is said to be stable
64
Markets
Where buyers and sellers exchange goods and services
65
Normal Goods
Products who's demand will increase as consumer income increases
66
Price elasticity of demand
A measure of the responsiveness of demand to a change in price of a good or service
67
Price elasticity of supply
A measure of the responsiveness of supply to a change in price
68
Producer Substitutes
Alternative scarce resources that a firm could use in production instead of the ones that it usually uses
69
Producer surplus
The difference between what a firm would receive from the sale of a product in a market and the minimum price that they they would be prepared to accept for it
70
Quality good
A product which demand curve slopes upward and from left to right as demand increase as price increase. This is because as price rises people think its quality has increased and so demand more
71
Rationing
The process of restricting the availability of goods and services so that not everyone can access them
72
Shortage
When the demand for a product is greater than the available supply so the prices rise.
73
Signalling
The act of giving information about a good or service to an economic agent
74
Speculative goods
A good or service with a demand curve that slopes upwards from left to right a result of people interpreting s price increase as an indication that the prices will continue to rise
75
Substitutes
Products that are alternatives to each other and cancer used in place of each other
76
Surplus
When the supply for a product is greater than the demand so prices fall
77
Veblen Goods
A product who's demand curve slopes upwards from left to right because was the prices rise ownership of that product takes on 'snob appeal' so people demand more
78
Division of Labour
Dividing jobs up into smaller and simpler tasks
79
Labour productivity
The amount of work done per worker in a given period of time
80
Specialisation
The act of concentrating one or a small number of things in order to get good at them
81
Surplus Output
The extra output created by specialisation we don't need for ourselves
82
Surplus Value
The difference between the cost of producing a product and the price that consumers are prepared to pay, which the workers create but are not paid for.

Economics (6 decks)

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