Paper 1 Key Terms Flashcards
What is a consumer ?
A person or organisation that directly uses a good or service
What is a producer ?
A person, company or country that makes, grows or supplies goods and services
What is the government
A political authority that determines how a country is run
What is a good ?
A tangible product that can be seen or touched
What is a service ?
An intangible product that can’t be seen or touched
What is profit ?
The amount of money a producer had left after all costs are paid
What is the economic problem ?
How to best use limited resources to satisfy the unlimited wants for people. ( Unlimited wants, finite resources )
What is the opportunity cost ?
The next best alternative given up when making a choice
What should be considered when trying to reduce the economic problem ?
- how should goods and services be produced ?
- what should be produced ?
- for whom should goods and services be produced
What is an economic choice ?
An option for the use of selected scarce resources
What is economic sustainability?
Best use of resources in order to create responsible development or growth, now and into the future
What is social sustainability?
The impact of development or growth that promotes an improvement in QOL for all, now and into the future
What is environmental sustainability?
The impact of development or growth where the effect on the environment is small and possible to manage, now and into the future
What is a market ?
A way of bringing buyers and sellers to buy and sell goods and service
What is a market economy ?
An economy in which scarce resources are allocated by the market forces of supply and demand
What is the primary sector ?
The direct use of natural resources including extraction of basic materials and goods from land and sea
What is the secondary sector ?
All the activities in an economy concerned with either manufacturing or construction
What is a product market ?
Where final goods and services are offered to consumers, businesses And the public sector
What is the tertiary sector?
All activities in an economy that involve the idea of a service
What is a factor market ?
Where the services of the factors of production are bought and sold
What is specialisation ?
Process by which individuals firms,regions and countries concentrate on producing those products they are best at producing
What is exchange?
The giving up of something that an individual or firm has in return for something they wish to have, but do not possess
What is demand ?
The willingness and ability to purchase a good or service at the given price in a given period of time
What is the law of demand ?
The quantity demanded varies inversely with price
What is individual demand ?
The demand for a good or service by an individual consumer
What is market demand ?
The total demand for a good or service found by adding together all individual demands
What is a subsidy ?
A amount of money given by government tax or firms to encourage production and consumption
What is PED?
The responsiveness of demand to a change on price
What is elastic demand ?
When the percentage change in quantity demanded is greater than the percentage change in price
What is inelastic demand ?
When the percentage change in quantity demanded is less than the percentage change in price
What is supply ?
The ability and willingness of firms to provide goods and services at each price in a given time
What is the law of supply ?
The quantity supplied varies directly with price
What is individual supply ?
Supply of a good or service by an individual producer
What is market supply ?
The total supply of a good or service found by adding all individual producers supply
What is PES?
The responsiveness of quantity supplied to a change in price of the product
What is elastic supply ?
When the percentage change in quantity supplied is greater than the percentage change in price
What is inelastic supply ?
When the percentage change in quantity supplied is less than the percentage change in price
What is price ?
The sum of money which has to be paid for a good or service
What is equilibrium price and quantity
Where the quantity supplied exactly matches the quantity demanded
What is the determination of price ?
The interaction of the market forces of demand and supply to establish the general level of prices for a good or service
What are market forces ?
The factors that determine price levels and the ability of goods and services in an economy without government intervention
What is competition?
Where different firms are trying to sell a similar product to a consumer
What is a monopoly?
A sole producer of a product where one producer has 25% or more of the market
What is an oligopoly?
It is where a small number of firms control the majority of the market share, if the 5 largest firms control over 50% of the market
What is productivity ?
The output per unit of input
What is production ?
The total output of goods and services produced by a firm or an industry in a period of time
What is total cost ?
All the costs added together
What is the average cost ?
The cost of producing a unit of output
What is the total revenue?
The total income of the firm from the sale of its goods and services
What is the average revenue?
The revenue per unit sold
What is a loss ?
When a firms revenue is less than its costs
What are economies of scale ?
The cost advantages a firm can gain by increasing the scale of production
What is a labour market ?
Where workers sell their labour and employers buy the labour
What is gross pay ?
The amount of money that an employee earns before deductions
What is net pay ?
The amount of money earned after deductions
What is income tax ?
A tax levied on personal income
What is national insurance?
A contribution paid by workers and their employers towards the cost of state benefits
What is pension ?
A fixed amount paid at regular intervals to a person or their surging dependants
What is money ?
Anything that is acceptable as a means of payment for goods and services
What is a medium of exchange?
Anything that sets the standard of value is good and services acceptable to all parties involved in a transaction
What is a building society?
Mutual financial organisations that are owned by their members
What is a bank ?
Financial institutions licensed to receive deposits and make loans
What is the financial sector?
Consist of financial organisations and their products and involves the flow of capital
