Micro Year 1 Flashcards
Ceteris paribus
Theme 1.1 Economics as Social Science
All things being equal; the assumption that, whilst the effects of a change in one variable are being investigated,a ll the other variablels are kept contsant
Law
Theme 1.1 Economics as Social Science
A thoery or model whihc has been verifited by empirical evidence
Normative economics
Theme 1.1 Economics as Social Science
The study and presnetioan of policy prescriptions invovling value judgements about the way in whihc scare resouces are allocated
Normatitve Statement
Theme 1.1 Economics as Social Science
A statement whihc cannot be supported or refuted because it is a value judgement
Positive Economics
Theme 1.1 Economics as Social Science
The scientific or objective study of the allocation of scare resources
Positive Statement
Theme 1.1 Economics as Social Science
A statement which can be supported or refuted by evidence
Scientific Method
Theme 1.1 Economics as Social Science
A method which subjects theories or hypotheses to falsification by empirical evidence
Social Science
Theme 1.1 Economics as Social Science
The study of societies and human behaviour using a variety of methods, including the scientific method
Theory or model
Theme 1.1 Economics as Social Science
A hypothesis which is capable of refutation by empirical
Base Period
Economic Data
The period, such as a year or a month, with which all other values in a series are compared
Index number
Economic Data
An indicator showing the relative valye of one number to another from a base of 100. It is often used to present an average of a number of statistics
Nominal values
Economic Data
Values unadjusted for the effects of inflation (i.e values at current prices)
Real values
Economic Data
Values adjusted for inflation (i.e. values at a constant price)
Basic economic problem
Theme 1.1.3 - The Economic Problem
Resouces have to be allocated between competeing uses because wants are infinite whilst resoucres are scarce
Capital
Theme 1.1.3 - The Economic Problem
As a factor of production is the stock of manufactured resources used in the production of goods and services
Choice
Theme 1.1.3 - The Economic Problem
Economic choice invovled the alternative uses of scare resources
Economic goods
Theme 1.1.3 - The Economic Problem
Goods that are scarce because their use has an opportunity cost
Entrepreneurs
Theme 1.1.3 - The Economic Problem
Indivduals who seek out profitable opportunites for production and take risks in attempting to exploit these
Enterprise or entrepreneurship
Theme 1.1.3 - The Economic Problem
As a factor of production is the seeking out of profitiable opportunites for production and taking risks in attempting to exploit these
Factors of Production
Theme 1.1.3 - The Economic Problem
The inputs to the production process: land, labour, capital and enterprise
Fixed capital
Theme 1.1.3 - The Economic Problem
Economic resource such as factories and hospitals whicha re used to transform working capital into goods and services
Free goods
Theme 1.1.3 - The Economic Problem
Goods that are unlimted in supply and which therefore have no opportunity cost
Human capital
Theme 1.1.3 - The Economic Problem
The value of the productive potential of an individual or group or wokers; it is made up of the skills, talents, eductation and trainign of an individual or group and represents the value of future earnings and production
Labour
Theme 1.1.3 - The Economic Problem
As a factor of production is the workforce
Land
Theme 1.1.3 - The Economic Problem
As a factor of production, is all natural resources
Needs
Theme 1.1.3 - The Economic Problem
The minimum that is necessary for a person to survive as a human being
Non-renewable resources
Theme 1.1.3 - The Economic Problem
Resources, such as coal or oil, which once exploited cannot be replaced
Non- sustainable resource
Theme 1.1.3 - The Economic Problem
A resource whihc can be economically exploited in such as a way that its stock being reduced over time
Opportunity cost
Theme 1.1.3 - The Economic Problem
The benefits forgone of the next alternative
Renewable resources
Theme 1.1.3 - The Economic Problem
Resources, such as fish stocks or forests, that can be exploited over and over again because they have the potential to renew themselves
Resources that are limited in supply so that choices have to made about their use
Sustainable resource
Theme 1.1.3 - The Economic Problem
Renewable resource that is being economically exploited in such a way that it will not diminish or run out
Wants
Theme 1.1.3 - The Economic Problem
Desires for the consumption of goods and services
Working or Circulating Capital
Theme 1.1.3 - The Economic Problem
Resources that are in the production system waiting to be transformed into goods or other materials before being finally sold to the consumer
Capital Goods
1.1.4 - Production Possibility Frontiers
Goods that are used in the production of other goods such as factories, offices, roads, machines and equipment
Consumer Goods
1.1.4 - Production Possibility Frontiers
Goods and services that are used ot people to satisify their needs and wants
Margin
1.1.4 - Production Possibility Frontiers
A point of possible change
Production Possibility Frontiers
1.1.4 - Production Possibility Frontiers
A curve which shows the maximum potential level of output of one good given a level of output for all others goods in the economy
Barter
1.1.5 - Specialisation and the division of labour
Swapping one good for another without the use of money
Capital Productivity
1.1.5 - Specialisation and the division of labour
Output per unit of capital employed
Division of Labour
1.1.5 - Specialisation and the division of labour
Specialisation by workers, who perform different tasks at different stages of production to make a good or service, in co-operation with other workers
Labour productivity
1.1.5 - Specialisation and the division of labour
Output per worker
Market
1.1.5 - Specialisation and the division of labour
Any convenient set of arrangements by which buyers and sellers communicate to exchange goods and services
Money
1.1.5 - Specialisation and the division of labour
Any item, such as a coin or a bank balence which fulfills four functions: A medium of exchange, a measure of value, a store of value and a method of deferred payment
Money subsititutes
1.1.5 - Specialisation and the division of labour
Anything which can be used as a medium of exchange but which are not stores of value. Examples are charge cards or credit cards
Primary sector
1.1.5 - Specialisation and the division of labour
Extractive and agricultural industries
Private sector
1.1.5 - Specialisation and the division of labour
The part of the economy owned by individuals, companies and charities
Productivity
1.1.5 - Specialisation and the division of labour
Output per unit of input employed
Secondary or manufacturing sector
1.1.5 - Specialisation and the division of labour
Industries involved in the production of goods, mainly manufactured goods