Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

GCSE Economics > Unit 1 > Flashcards

Unit 1 Flashcards

You may prefer our related Brainscape-certified flashcards:
GCSE Geography - AQA flashcards GCSE Religious Studies - Edexcel Route B flashcards GCSE Religious Studies - Eduqas Route A flashcards GCSE Religious Studies - Edexcel Route A flashcards GCSE Religious Studies - Eduqas Route B flashcards
1
Q

What are the factors of production?

A

CELL (mnemonic)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

CELL (mnemonic)

A

Capital
Enterprise
Labour
Land

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Needs

A

Something essential to survive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Wants

A

Something you would like to have, but is not essential to survival

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Resources

A

Something used to produce output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Productivity

A

Output per worker per period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Capital

A

Goods that are used to produce other goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Enterprise

A

Having ideas and taking risks in setting up or running a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Goods

A

Items that you can touch and see

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Service

A

Something that someone provides for you, that you cannot touch

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Primary sector

A

Where the extraction of raw materials takes place

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Secondary sector

A

Where raw materials are manufactured into goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Tertiary sector

A

The service sector

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Opportunity cost

A

The next best alternative foregone when making a choice

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Market

A

Where buyers and sellers meet to exchange goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Market economy

A

Where all resources are allocated by private individuals and firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Planned economy

A

Where all resources are allocated by the government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Mixed economy

A

Where some resources are allocated by the government, and other resources are allocated by private individuals and firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Private sector

A

The sector of the economy where firms are owned and run by private individuals and groups - their main aim is profit maximization

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Public sector

A

The government sector of the economy, where organisations are owned and run by the government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Benefits of specialisation to a firm

A

Workers become quicker at producing goods
Production becomes cheaper per good
Production levels are increased

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Benefits of specialisation to a worker

A

Specialised workers tend to get higher pay
Workers’ specific skills will be improved
More motivation from job satisfaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Costs of specialisation to a firm

A

Greater cost of training workers
Quality may suffer if workers get bored
More expensive workers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Costs of specialisation to a worker

A

Boredom from doing the same job every day
Workers’ skills may suffer as they are only doing one job
Workers may eventually be replaced by machinery

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Advantages of competitive markets to a consumer

A

Consumers can ‘shop around’ to get highest quality and lowest prices
Firms will try hard to innovate in order to provide more benefits for consumers
Firms will compete through location, opening hours and customer service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Disadvantages of competitive markets to a consumer

A

If all firms are small they can’t gain economies of scale and so lower prices
Confusion over too much competition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Advantages of competitive markets to a firm

A

Firms that can successfully provide products will thrive and earn profits
It may be able to grow large and gain market share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Disadvantages of competitive markets to a firm

A

Firms that fail to satisfy consumers sufficiently will fail

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Surplus

A

When more is produced than required

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Money

A

What we pay in exchange for goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Medium of exchange

A

To buy something in a shop, you must have money - money is the medium of exchange in this case

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Unit of account

A

If I were to say that a magazine is £1, I am giving this magazine a unit of account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Store of value

A

If I put £100 in a bank and take my £100 out later, it has kept its value (store of value).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Means of deferred payment

A

When you defer a figure of payment over a few payments over a period of time (e.g. loans).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Competitive market

A

A market in which there are many buyers and sellers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Monopoly

A

When there is only one firm selling in a market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

How can firms achieve monopoly power?

A

Merger and takeover
Statutory monopoly
Internal expansion
Branding
Cost barriers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Statutory monopoly

A

Key industries are given monopoly status by the government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Internal expansion

A

When a firm builds more factories and shops

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Cost barriers

A

Firms with low average costs can keep prices below the price at which small firms could enter the market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Monopoly power

A

When a firm has more than 25% of the market share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

What are the advantages of a monopoly?

A

R&D for a consumer
International competitiveness for a firm
Exploitation of economies of scale for a firm

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

What are the disadvantages of a monopoly?

A

High prices for a consumer
Poor quality for a consumer

44
Q

Demand

A

The quantity buyers are willing and able to buy at a given price in a given period of time

45
Q

Effective demand

A

A consumer must be both willing and able to buy the good and service when demand is effective

46
Q

Contraction of demand

A

The fall in the quantity demanded due to a rise in price

47
Q

Extension of demand

A

The increase in the quantity demanded due to a fall in price

48
Q

Factors that cause the demand curve to shift

A

PASIFIC

49
Q

PASIFIC

A

Population
Advertising
Substitutes
Income
Fashion and trends
Interest rates
Complements

50
Q

Inferior goods

A

Good for which the demand falls when income rises

51
Q

Substitutes

A

Goods that can be used instead of each other

52
Q

Interest rates

A

The reward for saving, and the cost of borrowing

53
Q

Complements

A

Goods that are in joint demand

54
Q

Price elasticity of demand (PED)

A

The responsiveness of the quantity demanded to a change in the price of a good

55
Q

PED =

A

% change in quantity demanded / % change in price

56
Q

Factors that influence PED

A

Number of close substitutes within the market
Luxuries and necessities
Percentage of income spent on a good
Habit-forming goods

57
Q

How do the number of close substitutes in a market influence PED?

A

The more substitutes are available in the market, the more elastic demand will be in response to a change in price

58
Q

How do luxuries and necessities influence PED?

A

Necessities tend to have a more inelastic demand, whereas luxury goods and services tend to be more elastic

59
Q

Supply

A

The quantity a producer is willing and able to produce in a given period

60
Q

Factors that cause the supply curve to shift

A

PINTSWC

61
Q

PINTSWC

A

Productivity
Indirect taxes
Number of firms entering market
Technology
Subsidies
Weather
Costs of production

62
Q

Price elasticity of supply (PES)

A

The responsiveness of quantity supplied to a change in price

63
Q

Factors that influence PES

A

Level of stocks
Production lags
Substitutability of factors of production

64
Q

How does the level of spare capacity influence PES?

A

If a price were to suddenly increase and the firm had spare capacity, it would be able to react very quickly and increase supply

65
Q

How does the substitutability of the factors of production influence PES?

A

If a firm can easily move the factors of production it uses in producing its goods between production lines, it will be able to respond mre quickly to changes in price

66
Q

Equilibrium

A

The point where demand and supply meet

67
Q

Indirect tax

A

A tax on spending

68
Q

Specific tax

A

A specific amount of a good or service per unit bought

69
Q

Ad valorem tax

A

A percentage of the price of a good or service

70
Q

Subsidy

A

A payment given to a firm by a company

71
Q

Minimum price

A

A price set above the equilibrium, and the price is not allowed to go below it

72
Q

Maximum price

A

A price set below the equilibrium, and the price is not allowed to rise above it

73
Q

Fixed costs

A

Costs that do not vary with output

74
Q

Variable costs

A

Costs that vary directly with output

75
Q

Total costs

A

All the costs of producing a good or service added together

76
Q

Total costs =

A

Fixed costs + Variable costs

77
Q

Average costs =

A

Total costs / output

78
Q

Output

A

The number of goodsor services produced by a firm

79
Q

Total revenue =

A

Price x Quantity sold

80
Q

Profit =

A

Total revenue / costs

81
Q

Production

A

The process of combining scarce resources to make an output

82
Q

What are the benefits of higher productivity from competition?

A

Lower average costs
Lower, more competitive price
Higher profits

83
Q

Specialisation

A

When an individual, firm, or country only produces a limited range of goods or services

84
Q

Internal growth

A

Growth generated from an increase in sales

85
Q

External growth

A

Growth through a merger or takeover

86
Q

Merger

A

Agreed coming together of two firms

87
Q

Takeover

A

When one firm seeks to take over another

88
Q

Integration

A

The coming together of two firms through a merger or takeover

89
Q

Economies of scale

A

As a firm grows larger in size, the long run average costs fall

90
Q

Internal economies of scale

A

When one firm grows in size and benefits from lower average costs

91
Q

External economies of scale

A

When a whole industry grows in size, so a firm within that industry benefits from lower average costs

92
Q

The 6 types of internal economies of scale

A

Risk bearing
Financial
Marketing
Technical
Managerial
Purchasing

93
Q

Risk bearing economies of scale

A

As a firm grows larger, it is able to spread the risk over a larger number of outlets/factories/products

94
Q

Financial economies of scale

A

As a firm grows larger, it is able to obtain cheaper sources of finance

95
Q

Marketing economies of scale

A

As a firm grows larger, it will be more cost-effective to advertise nationally

96
Q

Technical economies of scale

A

As a firm grows larger, it will be able to invest in machinery that can increase productivity

97
Q

Managerial economies of scale

A

As a firm grows larger, it is able to employ specialist managers to make workers more efficient

98
Q

Purchasing economies of scale

A

As a firm grows larger, it will be able to take advantage of price reductions from suppliers, as it can buy in bulk

99
Q

Diseconomies of scale

A

When a firm grows too large and average costs rise

100
Q

Causes of diseconomies of scale

A

Loss of control
Lack of co-ordination / lack of co-operation

101
Q

Reasons for the differences in wages within and between occupations

A

Differences in productivity of workers
Elasticity of supply of labour
Trade union power
Compensation

102
Q

How does the elasticity of supply of labour affect a difference in wages?

A

The more inelastic the supply, the higher the wage

103
Q

Why might a doctor’s salary be higher than a nurse’s salary?

A

A doctor’s salary is higher because the supply of doctors is inelastic, due to the high level of qualifications needed

104
Q

Why does compensation affect a difference in wages?

A

Higher pay may be a reward for risk-taking in certain jobs - working in poor conditions or unsocial hours

105
Q

National minimum wage

A

A pay floor introduced by the government, which sets a wage level below which producers cannot legally go

106
Q

What are the arguments for a national minimum wage?

A

Higher tax revenue
Income is more fairly distributed across the population
Poverty is reduced

107
Q

What are the arguments against a national minimum wage?

A

More expensive to employ workers, so firms may cut jobs and increase unemployment
Other workers may demand higher wages to maintain pay differentials
Higher wage costs lead to rising inflation

GCSE Economics (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions