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economics > theme 1 section 1 > Flashcards

theme 1 section 1 Flashcards

1
Q

what is the basic economic problem

A

scarcity (unlimited wants but resources are finite

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2
Q

scarcity creates opportunity cost. what is this?

A

Opportunity cost is the benefit lost of the next best alternative

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3
Q

what are the economic agents

A

Governments,individuals, and firms

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4
Q

How does the economic problem effect the government

A

The government has to make a choice between spending money on the NHS or Schools

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5
Q

How does it effect firms

A

Firms have to make choices and sacrifices like chosing weather to employ new staff or invest in a new machine

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6
Q

what are the factors of production

A

land, labour, enterprise, capital

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7
Q

what is profit maximisation

A

This is what a buisnesses main objective is. This is the difference between total revenue and total costs.This is the rewad entrepeneurs yield

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8
Q

What is marginal costs

A

The change in total production cost that comes from making or producing 1 extra unit
mc=mr 1 or more unit creates no loss or no extra revenue
mr>mc profits increase
mc>mr profits decrease

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9
Q

Satisficing (who in a firm typically does this)

A

makes enough profit to be satisfied and keep their shareholders happy.
(managers potentially don’t want to max profit because it isn’t their company so maintain work life balance

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10
Q

What are the three sectors of economy

A

public (NHS) gov owned
Private (partners)
3rd (charity)

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11
Q

what does revenue mean

A

total money brought in over a set time

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12
Q

Why does a company want profit maximisation

A

Because this provides higher wages and less high interest rates

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13
Q

what is a shareholder

A

part owners of a company public or private

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14
Q

What is a stakeholder

A

A person/group/organisation with interest in the company

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15
Q

what are divdens

A

Sum of money paid from a company to its shareholders

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16
Q

What does it mean when a company is ethical

A

moral guidelines which govern good behavior

17
Q

What is CSR!

A

Corporate social responsibility- operating in a way which does not degrade society or the environment (gives positive brand image)

18
Q

How can productivity be increased

A

it can be increased through financial incentives like pay rises this can increase output. There can also be non financial incentives like early finishes.

19
Q

What is specialisation

A

the optimum use of resources with means of reaching maximum efficency

20
Q

productivity definition

A

output per unit of input

21
Q

WHat is scarce for a firm

A

profit and revenue

22
Q

What is scarce for individuals

A

income

23
Q

What is scarce for gov

A

Tax revenue

24
Q

What are entrepreneurial motives

A

being their own boss, money, providing a service that is lacked, community, work life balance

25
Q

What are entrepreneurial characteristics

A

Perseverance, positive thinking, self motivated, enthusiastic and creative

26
Q

What is creative destruction

A

A term created by Joseph Schumpeter in 40s. The idea that when an Entrepreneur creates a new product something else is considered old and destroyed. Something new destroys something old.

27
Q

What is an Entrepeneur

A

A person who spots an opportunity and shows initiative and willingness to take risks in order to gain potential rewards. They run the other 3 factors of production

28
Q

financial motives

A

Seek max profit
Profit = sales rev - total cost

29
Q

Ethical motivation

A

To be deemed morally correct due to CSR and business manner
To provide a service that is ethical e.g not testing on animals

30
Q

Added value

A

Means it is guaranteed that the entrepreneur is making profit as they are selling for more than the input

31
Q

Social Entrepreneurship

A

Motivated by providing a service that uses profit to further support the cause

32
Q

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A

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economics (10 decks)

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