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economics > topic one chapters 1-10 > Flashcards

topic one chapters 1-10 Flashcards

1
Q

economics

A

study of scarcity

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2
Q

social science

A

scientific study of human society and social relationships

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3
Q

positive statments

A

scientific proven

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4
Q

normative statements

A

matter of opinion and reflect value judgements

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5
Q

morel judgement

A

based on what is deemed to be good or right

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6
Q

political judgment

A

based on the need to apple to a certain group of people

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7
Q

goods

A

tangible items that can be seen and touched and that satisfy human needs and wants

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8
Q

servives

A

intangible items that satisfy human needs and wants e.g train journeys

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9
Q

production

A

the provision of goods and services to satisfy needs and wants

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10
Q

needs

A

what humans require for basic survival

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11
Q

wants

A

human desires beyond basic needs for human survival

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12
Q

labour

A

is the human effort, both physical and mental that is used in the production of goods and services

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13
Q

land

A

natural resources encompassing not only land but also minerals such as coal, ag crops and livestock

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14
Q

capital

A

goods produced by society in order to assists production of other goods e.g machines, company verticals, capital goods are essentail because they allow the economy to increase output in the future

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15
Q

enterprise

A

combination of other factors of production that are used to produce goods and serives, entrupnures undertake this action and are motivated by profit.

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16
Q

what are the four factors of production?

A

land, labour, capital, entprise

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17
Q

opportunity cost

A

next best alternative that was given up when making a choice

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18
Q

a production possibility diagram

A

shows that maximum combination of goods and services that can be provided by an econemy or firm durin a given period of time with the resources avaliale

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19
Q

productive efficiency

A

measures how well and econmey or firm uses its resources to produce output

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20
Q

allocative efficiency

A

means that resources are being used to produce the goods and services that consumers wish to buy.

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21
Q

demand

A

is the amount of good or service that consumers in a market are willing and able to buy at any given price over a period of time

22
Q

does demand have anything to do with price?

A

no

23
Q

income

A

flow of earnings paid to labour over a period of time

24
Q

wealth

A

stock of assets owned by an individual or orgnisation

25
Q

substuites

A

goods or services that can replace each other

26
Q

complements

A

good and services that are used along side each other

27
Q

individual preferences

A

range of factors that influence peoples desires and consequently their demand for specific products

28
Q

the demand curve

A

shows the relationship between the price of a good and quantity demanded for that good

29
Q

price elasticity of demarnd

A

measures the responsiveness of quantity demanded of a product to the change in price of that product

30
Q

income elasticity of demand

A

measures the responsiveness of the quantity demanded of a product to the change in income of consumers

31
Q

cross elasticity of demand

A

measures the responsiveness of the quantity demanded of a product to a change in the price of another product

32
Q

normal goods

A

goods that experience an increase in quantity demanded as incomes increase, other things being equal

33
Q

inferior goods

A

goods that experience decrease in quantity demanded as income incraeses, other things being equal

34
Q

factors influencing price elasticity of demand

A

-degree of necessity
-persentage of income spend on a good
-income of the consumer
-generic or branded goods

35
Q

factors leading to demand being price inelastic

A

high degree of necessity
-very habit forming
-no or few close subs
-low persentage of income spent on goods
-high income
-generic goods
-short run time period

36
Q

factors leading to demand being price elastic

A

-not a necessity
- not habit forming
-not many close substitutes
-high % of income spent on goods
-low income
-branded goods
-long run time period

37
Q

supply

A

amount of a good or serivice that firms intend to offer for sale at any given price over a period of time

38
Q

the supply curve

A

shows the relationship between the price of a good and quantity supplied of that good

39
Q

three factors contributing to a increase in supply

A

increase of a price of a good in joint supply
- decrease in the price of a good in competitive supply
-expectations that the price will rise in the future
- decrease in labour costs
- improvements in technology

40
Q

five factors that cause a decrease in supply

A
  • decrease in the price of a good in joint supply
  • increase in the price of a good in competitive supply
    -expectations that the price will fall in the future
    -increase in labour costs
    -increase in other production costs
    -ineffective use of technology
41
Q

price elasticity of supply (PES)

A

measures the responsiveness of the quantity supplied of a product through to a change in a price of that product

42
Q

PES equation

A

%change in quantity supplied of product X OVER/ % change in price of product X

43
Q

factors influencing price elasticity of supply

A

-time
-spare capacity
- ease of acquiring new resources
-ease of switching production
-length of production process
-level of stock held

44
Q

factors leading to supply being more price inelastic

A

-short run
-limited or no spare capacity
-diffcult to aquire
-diffcult to switch
-legthy production process
-low stock levels

45
Q

factors leading to supply being more price elastic

A

-long run
-high levels of spare capacity
-ease to acquire
-ease to switch
-quick production process
-high stock levels
-many firms/ease to enter

46
Q

market price

A

price at which market is in equilibrium because the quality that customers want to buy (demarnd) is the same as quantity that firms want to offer.

47
Q

an equilibrium

A

position which there is no tendency to change

48
Q

a disequilibrium

A

is a position from which there is no tendency to change

49
Q

maket equilibrium

A

is a situation in which the price is such that quantity that the customers want to buy is the same as the quantity firms want to supply

50
Q

excess demand

A

is a situation in which the price is such that quantity demanded exceeds the quantity offered for supply

51
Q

excess supply

A

situation in which the price is such that the quantity offered exceeds the amount that is demanded

economics (6 decks)

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