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Economics > Key terms > Flashcards

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
Q

Model

A

A scientific simplification of the way in which something works in order to study how it works

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26
Q

Normative economics

A

The part of economics concerned with opinions and value judgements

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27
Q

Opportunity cost

A

The alternative that is given up when choosing one thing instead of another

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28
Q

Positive economics

A

The part of economics that is concerned with facts and statements that can be proved to be true

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29
Q

Primary production

A

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.

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30
Q

Privately provided Goods

A

Goods or services that are manufactured and supplied by firms which are not owned by the government

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31
Q

Production Possibility

A

The maximum output that can be produced from a given set of scarce resources, which have been used as efficiently as possible.

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32
Q

Production possibility curve

A

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

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33
Q

Productive efficiency

A

Producing a good or service for the minimum average unit cost

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34
Q

Products

A

Any goods or services

35
Q

Publicly provided goods

A

Products which are created and sold by the government

36
Q

Relative needs

A

Products that become necessary to survive within the society in which you live

37
Q

Scarcity

A

The existence of only a limited quantity of something

38
Q

Scientific Method

A

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
Q

Secondary production

A

Processing raw materials into finished goods

40
Q

Tertiary Production

A

Providing a service to any branch of industry or consumers

41
Q

Wants

A

Desires to obtain a good or service that you do not have

42
Q

A Market

A

Any way of putting buyers and sellers in touch so they can exchange goods or services

43
Q

Complements

A

Products that are often bought together as they work well together so are often consumed together e.g bread and butter

44
Q

Composite Demand

A

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
Q

Consumer surplus

A

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
Q

Contraction

A

A leftward movement along a demand or supply curve

47
Q

Cross elasticity of demand

A

The measure of responsivenss of the demand for one product in response to a change in price of another product

48
Q

Demand

A

The amount of goods and services people are willing to buy at a given price over a given period of time.

49
Q

Disequilibrium

A

Where the forces of supply and demand are not balanced causing incentive to change

50
Q

Derived Demand

A

Where the demand for one product is created because it is required to satisfy the demand for another

51
Q

Excess

A

Where there is a surplus of something

52
Q

Extension

A

A movement to the right along a supply or demand curve

53
Q

Giffen good

A

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
Q

Incentives

A

A situation where there is a force influencing an economic agent to make a decision in a certain way

55
Q

Incentivising

A

An action that creates a force influencing an economic agent to make a decision in a specific way

56
Q

Income elasticity of demand

A

A measure of the responsiveness of consumer demand in response to a change in income

57
Q

Inferior goods

A

Products for which the demand increases as price increases

58
Q

Joint Demand

A

Products that are demanded together because they are both needed to provide the benefit to the consumer

59
Q

Jointly supplied goods

A

Products that are supplied at the same time, usually because one is a by product of the other one

60
Q

Luxury goods

A

Products who’s demand increases by a relatively large amount as income increases

61
Q

Market segment

A

Groups of consumers within a market that have similar wants or desires

62
Q

Market share

A

The proportion of the total sales of a market that a product - or business - holds

63
Q

Market stability

A

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
Q

Market stability

A

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
Q

Markets

A

Where buyers and sellers exchange goods and services

65
Q

Normal Goods

A

Products who’s demand will increase as consumer income increases

66
Q

Price elasticity of demand

A

A measure of the responsiveness of demand to a change in price of a good or service

67
Q

Price elasticity of supply

A

A measure of the responsiveness of supply to a change in price

68
Q

Producer Substitutes

A

Alternative scarce resources that a firm could use in production instead of the ones that it usually uses

69
Q

Producer surplus

A

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
Q

Quality good

A

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
Q

Rationing

A

The process of restricting the availability of goods and services so that not everyone can access them

72
Q

Shortage

A

When the demand for a product is greater than the available supply so the prices rise.

73
Q

Signalling

A

The act of giving information about a good or service to an economic agent

74
Q

Speculative goods

A

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
Q

Substitutes

A

Products that are alternatives to each other and cancer used in place of each other

76
Q

Surplus

A

When the supply for a product is greater than the demand so prices fall

77
Q

Veblen Goods

A

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
Q

Division of Labour

A

Dividing jobs up into smaller and simpler tasks

79
Q

Labour productivity

A

The amount of work done per worker in a given period of time

80
Q

Specialisation

A

The act of concentrating one or a small number of things in order to get good at them

81
Q

Surplus Output

A

The extra output created by specialisation we don’t need for ourselves

82
Q

Surplus Value

A

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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