Subject Vocabulary Flashcards
1
Q
External economies of scale
A
cost benefits that all firms in an industry can enjoy when the industry expands
2
Q
Bulk buying
A
buying goods in large quantities, which is usually cheaper than buying in small quantities
3
Q
Internal economies of scale
A
cost benefits that an individual firm can enjoy when it expands
4
Q
Diseconomies of scale
A
rising average costs when a firm becomes too big
5
Q
Economies of scale
A
falling average costs due to expansion
6
Q
Scale
A
size of a business
7
Q
Total cost
A
fixed costs and variable costs added together
8
Q
Variable costs
A
costs that change when output levels change
9
Q
Costs
A
expenses that must be met when setting up and running a business
10
Q
Fixed costs (overheads)
A
costs that do not vary with the level of output
11
Q
Division of labour
A
breaking down of the production process into small parts with each worker allocated to a specific task
12
Q
Specialisation
A
production of a limited range of goods by individuals, firms, regions or countries
13
Q
Job rotation
A
practice of regularly changing the person who does a particular job
14
Q
Piece rate
A
amount of money that is paid for each item a worker produces, rather than for the time taken to make it
15
Q
Productivity
A
rate at which goods are produced, and the amount produced in relation to the work, time and money needed to produce them
16
Q
Assembly plants
A
factory where parts are put together to make a final product
17
Q
Secondary sector/industry
A
production involving the processing of raw materials into finished and semi-finished goods
18
Q
Tertiary sector/industry
A
production of services in the economy
19
Q
De-industrialization
A
decline in manufacturing
20
Q
Primary sector/industry
A
production involving the extraction of raw materials from the earth
21
Q
Capital intensive
A
production that relies more havily on machinery relative to labour
22
Q
Labour intensive
A
production that relies more heavily on labour relative to machinery
23
Q
Fixed capital
A
stock of ‘man-made’ resources, such as machines and tools, used to help make goods and services
24
Q
Entrepreneurs
A
individuals who organise the other factors of production and risk their own money in a business venture
25
Human capital
value of the workforce or an individual worker
26
Labour
people used on production
27
Working capital or circulating capital
resources used up in production such as raw materials and components
28
Factors of production
resources used to produce goods and services which include land, labour, capital and enterprise
29
Production
process that involves converting resources into goods or services
30
Pollution permit
government issued document that gives a business the right to discharge a certain quantity of a polluting material into the enviroment
31
Private benefits
benefits received by those directly consuming or producing a product or service
32
Social benefits
benefits of an economic activity to society as well as to the individual or firm
33
Social costs
costs of an economic activity to society as well as the individual or firm
34
Private costs
costs of an economic activity to individuals and firms
35
External benefits
positive spillover effects of consumption or production - they bring benefits to third parties
36
External costs
negative spillover effects of consumption or production - they affect third parties in a negative way
37
Spillover effects
effect that one situation or problem has on another situation
38
Diversified
if a company or economy diversifies, it increase the range of goods or services it produces
39
Hostile takeover
takeover that the company being taken over does not want or agree to
40
Takeovers
act of getting control of a company by buying over 50 percent of its shares
41
Nationalised industries
public corporations previously part of the private sector that were taken into state ownership
42
Natural monopolies
situation that occurs when one firm in an industry can serve the entire market at ta lower cost than would be possible if the industry were composed of many smaller firms
43
Monopolies
situation where a business activity is controlled by only one company or by the government, and other companies do not compete with it
44
Privatisation
act of selling a company or activity controlled by the government to private investors
45
Free rider
individual who enojoys the benefit of a good but allows others to pay for it
46
Merit goods
goods that are under-provided by the private sector
47
Public goods
goods that are not likely to be provided by the private sector
48
Market failure
where markets lead to inefficiency
49
Mixed economy
economy where goods and services are provided by both the private and the public sectors
50
Assets
things or resources belonging to an individual or a business that has value or the power to earn money
51
Liabilities
amount of debt that is owed or must be paid
52
Dividend
part of a company's profit that is divided among the people with shares in the company
53
Shareholders
people or organisations that owns shares in a company
54
Economy
system that attempts to solve the basic economic problem
55
Private sector
provision of goods and services by businesses that are owned by individuals or groups of individuals
56
Public sector
government organisations that provide goods and services in the economy
57
Exise duty
government tax on certain goods, such as cigarettes alcoholic drinks and petrol that are sold in the country
58
VAT (value added tax)
tax on some goods and services - businesses pay value added tax on most goods and services they buy and if they are VAT registered, charge value added tax on the goods and services they sell
59
Discretionary expenditure
non-essential spending or spending that is not automatic
60
Income elasticity of demand
responsiveness of demand to a change in income
61
Raw materials
substances used to make a product
62
Wholesalers
person or companh that sells goods in large quantities to businesses, rather than to the general public
63
Price elasticity of supply
responsiveness of supply to a change in price
64
Fast-moving consumer good (FMCG)
goods, especially food, that sell very quickly and in large amounts
65
Price elasticity of demand
the responsiveness of demand to a change in price
66
Excess supply
where supply is greater than demand and there are unsold goods in the market
67
Excess demand
where demand is greater than supply and there are shortages in the market
68
Total revenue
amount of money generated from the sale of goods calculated by multiplying price by quantity
69
Market clearing price
price at which the amount supplied in a market matches exactly the amount demanded
70
Equilibrium price
price at which supply and demand are equal
71
Consumption
amount of goods, services, energy or natural materials used in a particular period of time
72
Subsidy
money that is paid by a government or organisation to make prices lower, reduce the cost of producing goods or providing a service, usually to encourage production of a certain good
73
Indirect taxes
taxes levied on spending, such as VAT
74
Productivity
rate at which goods are produced and the amount produced in relation to the work, time and money needed to produce them
75
Ventures
new business activities or projects that involve taking risks
76
Shift in the supply curve
movement to the left or right of the entire supply curve when there is any change in the conditions of supply except the price
77
Proportionate relationship
(between price and quantity supplied) when the price goes up, the quantity supplied also goes up and when the price goes downn the quantity supplied goes down
78
Supply
amount that producers are willing to offer for sale at different prices in a given period of time
79
Supply curve
line drawn on a graph which shows how much of a good sellers are willing to supply at different prices
80
Substitute goods
goods bought as an alternative to another but perform the same function
81
Complementary goods
goods purchased together because they are consumed together
82
Infrastructure
basic systems and structures that a country needs to make economic activity possible, for example, transport, communication and power supplies
83
Disposable income
income that is available to someone over a period of time to spend; it includes state benefits but excludes direct taxes
84
Inferior goods
goods for which demand will fall if income rises or rise if income falls
85
Normal goods
goods for which demad will increase if income increases or fall if income falls
86
Shift in the demand curve
movement to the left or right of the entire demand curve when there is a change in any factor affecting demand except the price
87
Demand curve
line drawn on a graph that shows how much of a good will be bought at different prices
88
Demand schedule
table of the quantity demanded of a good at different price levels - can be used to calculate the expected quantity demanded
89
Effective demand
amount of a good people are willing to buy at given prices over a given period of time supported by the ability to pay
90
Inverse relationship
(between price and quantity demanded) when price goes up, the quantity demanded falls and when the price goes down the quantity demanded rises
91
Administration
activities involved with managing and organising the work of a company or organisation
92
Enterprises
companies, organisations or businesses
93
Maximise
to increase something such as profit, satisfaction or income as much as possible
94
Revenue
money that a business receives over a period of time, especially from selling goods or services
95
Variables
something that affects a situation in a way that means you cannot be sure what will happen
96
Economic growth
increase in the level output by a nation
97
Capital goods
those purchased by firms and used to produce other goods such as factories machinery, tools and equipment
98
Consumer goods
those purchased by households such as food, confectionery, cars, tablets and furniture
99
Production possibility curve (PPC)
line that shows the different combinations of two goods an economy can produce if all resources are used up
100
Opportunity cost
cost of the next best alternative given up (when making a choice)
101
Expenditure
spending by a government, susually a national government
102
Basic economic problem
allocation of a nation's scarce resources between competing uses that represent infinite wants
103
Scarce resources
amount of resources avilable when supply is limited
104
Finite
having an end or a limit
105
Infinite
without limits
106
