Markets In Action Flashcards
Market
Where buyers and sellers meet to exchange goods and services.
Economic Problem
Resources are scarce but wants are unlimited.
Economic Resources (Factors of Production)
The resource inputs that are available in an economy for the production of goods and services, i.e. land, labour, capital and entrepreneurship.
Land
Natural resources in an economy, e.g. sea, oil.
Labour
Human resource available in an economy.
Capital
Physical resource covering any man made aid for production, e.g. factories, machines, roads.
Entrepreneurship
The willingness of an entrepreneur to take risks and organise production of the other economic resources.
Opportunity Cost
Benefits foregone from choosing the next best alternative.
Scarcity
Situation where there are insufficient resources to meet all wants.
Production Possibility Curve
Curve showing the maximum output of a combination of two types of products that can be produced efficiently with a country’s existing resources and technology.
Specialisation
The concentration by a worker or workers on a narrow range of tasks to increase labour productivity or a firm/economy concentrating on a narrow range of products to increase efficiency and output.
Demand
The willingness and ability for consumers to buy a product at each given price.
Consumer Surplus
Difference between the value a consumer places on the good/service and the equilibrium price in the market.
Supply
The quantity that a firm is willing and able to produce at each given price.
Producer Surplus
Difference between the price that producers are willing to supply their product for and the price they actually receive.
