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Jr 1 - econs > unit 1 > Flashcards

unit 1 Flashcards

1
Q

what is the basic economic problem

A

human wants and needs are limitless but resources are scarce

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1
Q

define economics

A

a social science that studies how economic stakeholders interact, behave and use scarce resources

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2
Q

what is an economic stakeholder

A

anyone that impacts or is impacted by economic decisions and activities

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3
Q

list the six economic stakeholders

A
  1. consumers/individuals
  2. producers/firms
  3. labours/workers
  4. government
  5. environment
  6. community
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4
Q

define ‘opportunity cost’

A

the value or benefit of the next best alternative foregone

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5
Q

what is the main opportunity cost of a consumer

A

opportunity cost arises when consumers make choices on what goods and services to purchase and consume

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6
Q

what is the main opportunity cost of a producer

A

opportunity cost arises when producers make choices on what goods and services to produce and how to produce them

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7
Q

what is the main opportunity cost of a worker

A

opportunity cost arises for workers when they make choices on what they want to work as and who they want to work for

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8
Q

what is the main opportunity cost of the government

A

opportunity cost arises for the government when they make choices on the policies they make and what to spend on public expenditure

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9
Q

list the factors of production

A
  1. land
  2. labour
  3. capital
  4. enterprise
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10
Q

what does ‘land’ refer to

A

all natural resources

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11
Q

give some examples of ‘land’

A

oil, coal, sand, stone, fossil fuels, minerals, fields, soils, seas, lakes, oceans, rivers, sunlight, air, forestry, plants, animals, etc

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12
Q

what does ‘labour’ refer to

A

all human resources

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13
Q

give some examples of ‘labour’

A

knowledge, skills, experience and expertise of a worker

(teachers, doctors, scientists, chef, nurse, waiter, cashier)

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14
Q

what does ‘capital’ refer to

A

man made resources used to aid in the production of other goods and services

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15
Q

give examples of ‘capital’

A

machinery, tools, equipment, vehicles, factories, buildings, roads, railways etc

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16
Q

define enterprise

A

the willingness and ability to take on the risk and reward when combining the factors of production to produce goods and services

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17
Q

give examples of ‘enterprise’

A

sole traders, partnerships, public limited companies, private limited companies, non-profit organisations etc

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18
Q

list the factor rewards

A
  1. land - rent
  2. labour - wages
  3. capital - intrest
  4. enterprise - profit
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19
Q

define ‘free goods’

A

goods with no opportunity cost

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20
Q

give some examples of ‘free goods’

A

water, air, sunlight

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21
Q

define ‘economic goods’

A

goods with opportunity cost

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22
Q

define ‘consumer goods’

A

goods used and consumed by consumers

23
Q

define ‘capital goods’

A

goods used by firms to produce other goods and services

24
Q

define ‘private goods’

A

goods that can be excludable and rivalrous

25
Q

define ‘public goods’

A

goods that are non-excludable and non-rivalrous

26
Q

define ‘merit goods’

A

goods that have benefits, have positive externalities, and are usually under-consumed and underproduced in a free market

27
Q

give examples of merit goods

A

education, healthcare, waste disposal services

28
Q

give some examples of public goods

A

street lamps, lighthouse, national defence

29
Q

define ‘demerit goods’

A

goods that are harmful, have negative externalities, and are usually over-consumed and overproduced in a free market.

30
Q

give some examples of demerit goods

A

cigarettes, alcohol, junk food

31
Q

what are the classification of goods and services

A

free goods and economic goods

32
Q

what are the two types of factor mobilty

A

occupational mobility and geographical mobility

33
Q

define ‘occupational mobility’

A

the degree to which a factor of production can change its USE

34
Q

define ‘geographical mobility’

A

the degree to which a factor of production can change its LOCATION

35
Q

what is a production possibility curve (PPC)

A

a curve that shows the MAXIMUM OUTPUT of TWO types of products and the COMBINATION of those products that can be produced with EXISTING RESOURCES and TECHNOLOGY

36
Q

how occupationally mobile is land

A

mostly mobile

37
Q

how occupationally mobile is labour

A

it depends on several factors

38
Q

how occupationally mobile is capital

A

it depends on the type of capital

39
Q

how occupationally mobile is enterprise

A

the most mobile

40
Q

how geographically mobile is land

A

mostly immobile

41
Q

how geographically mobile is labour

A

it depends on several factors

42
Q

how geographically mobile is capital

A

it depends on the type of capital

43
Q

how geographically mobile is enterprise

A

the most mobile

44
Q

give some examples of how land is occupationally mobile

A
  • forestry can be used to produce paper, rubber, wooden furniture, wood tables, wood chairs
  • cows can be used to produce dairy products (milk, cheese, etc) leather, instruments, meat, a mode of transport and fertilisers from it’s waste
45
Q

give some examples of how labour is occupationally mobile

A

it depends on a person’s knowledge, experience, expertise, qualification and skills

  • a doctor can also be a check if they know how to cook well (the knowledge, experience, qualification)
  • a lawyer cannot be a chef if they don’t know how to cook well (the knowledge, experience, qualification)
46
Q

give some examples of how capital is occupationally mobile

A
  • an oven can be used to bake pizza in a restaurant or cakes at a bakery
  • a road can only be used for travelling on.
47
Q

give some examples of how enterprise is occupationally mobile

A

a sole proprietor should be able to produce a vast variety of goods and services.

48
Q

give some examples of how land is geographically mobile

A
  • the sun, oceans, river, lakes, mountains cannot be moved
  • a cow or horse can easily be moved
49
Q

give some examples of how labour is geographically mobile

A

it depends on:
- transport, family obligation, housing, ability to gain work visas etc

50
Q

give some examples of how capital is geographically mobile

A
  • an oven can be moved easily
  • vehicles can be moved easily
  • a building cannot be moved easily
  • roads cannot be moved easily
51
Q

give some examples of how enterprise is geographically mobile

A

a sole proprietor should be willing and able to move from one part of the city/country to another to run their business.

52
Q

what does PPC stand for

A

production possibility curve

53
Q

define the term ‘shift outwards’

A

a PPC will shift outwards if there is an increase in the quantity or quality of factors of production in the economy

54
Q

define the term ‘shift inwards’

A

a PPC will shift inwards if there is a reduction in the quantity or quality of factors of production in the economy

55
Q

define the term ‘pivot outwards’

A

a PPC will pivot outwards if there is an increase in the quantity or quality of factors of production for a specific or particular sector/industry/product in the economy

56
Q

define the term ‘pivot inwards’

A

a PPC will pivot inwards if there is a reduction in the quantity or quality of factors of production for a specific or particular sector/industry/product in the economy

Jr 1 - econs (2 decks)

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