Micro definitions 1 Flashcards
inc fundamentals of economics
social science
Studies society as a whole and the RS of the individuals within said society
Positive Statements
do not have to be correct but must be able to be scientifically tested, proved, disproved
Normative Statements
Based on value judgements and so cannot be proved or disproved
Scarcity
Insufficient resources to meet peoples unlimited wants
When people would like to consume more products than the economy is capable of producing with its limited resources
Goods
Tangible products that can be touched and measured eg food
Services
Intangible items that cannot be touched or measured eg banking
Utility
Total satisfaction received from consuming a good or service
Needs
Goods/services required to maintain existence/life eg shelter
Wants
Goods/services that we desire but are not necessary for maintaining existence/life eg watches
Renewable Resources
natural resources of economic value that can be replaced or replenished at a rate equivalent to their consumption eg wind energy
Non-renewable/ finite resources
natural resources of economic value that cannot be readily replaced by natural means at a rate equivalent to that of their consumption eg coal
Fundamental Economic Problem
How best to allocate scarce resources among their alt uses to max human happiness/welfare/utility
Oppurtunity Cost
the cost of missing out on the next best alternative
Economic Agents
Decision makers that have effects on the economy of a country by buying, producing, selling etc
Household
Group of consumers that buy goods and services
Supply labour to firms to produce goods and services in order to earn income needed to purchase goods and services
Firm
An org that uses factors of production alongside eachother in order to produce output.
Produce goods and services demanded by consumers
Government
A governing body that undertakes expenditure and impacts the economy via tax and regulation of markets.
Production
A process that converts inputs into outputs of goods and services
Factors Of production
Available resource inputs used in the production process of goods and services
Capital
Man-made aids ie goods made to make other goods
MERC:
Machines
Equipment
Robots
Computers
Enterprise
Willingness of an entrepeneur to take risks and organise production
Land
The natural resource that is available in an economy
Labour
The human resource that is available in an economy
Quantity and quality of human resources
Consumer Goods
Goods bought and used by individuals or households to satisfy heir needs or wants eg Watches
