Unit 1 Economics Revision Glossary (from Ms. Piestch revision sheet)

Question 1

Relative Scarcity

Answer 1

The Economic Problem.
When there is unlimited wants but limited resources.

Relative Scarcity= Wants > Resources

Question 2

Needs

Answer 2

goods and services necessary for our survival

Question 3

Wants

Answer 3

goods and services that make our lives more comfortable but are not essential

Question 4

Scarce Resources

Answer 4

**when there is not enough materials for production

Question 5

Opportunity Cost

Answer 5

the benefit foregone/sacrificed when deciding between alternatives

Question 6

Factors of Production

Answer 6

** resources that are used to make up things in the economy.
there are 4 factors:
Land/natural - water, forests, animals, land, fruits and vegs
labour - workers employed by business or gov in return for salary
captial - machinery, factories & equipment
entrepreneurship/enterprise - Bill Gates, J

Question 7

Economic System

Answer 7

**people who work in the economy, either in the public or private sector

Question 8

Microeconomics

Answer 8

examination of the smaller parts that makes up the economy

Question 9

Macroeconomics

Answer 9

examination of aspects or performance of the entire economy

Question 10

Market

Answer 10

any place where buyers and sellers of goods and services come together in exchange.
can be physical or non physical

e.g: physical - Queen Victoria Market
non-physical - Ebay

Question 11

Production Possibility Frontier/Curve (PPC)

Answer 11

Tool by economists to represent alternatives available to an economy in the form of a diagram

Question 12

Recession

Answer 12

downturn in economic activity (above 0% is not trough, below 0% is trough)

Question 13

Boom

Answer 13

rise in economic activity (below 4% is peak, above 4% is boom)

Question 14

Sustainable Economic Growth

Answer 14

development that meets the needs of the present without compromising the ability of future generations to meet their own needs

Question 15

Wealth

Answer 15

The total monetary value of assets which could be used to purchase goods and services in the future

Question 16

Income

Answer 16

Money received by a household or other entity that is primarily to be used for the purchase of goods & services

Question 17

Inflation

Answer 17

A sustained increase in the general price level over time

Question 18

Material Living Standards

Answer 18

the amount of goods & services that can be purchased with a given level of income

Question 19

Non-Material Living Standards

Answer 19

things that money can’t buy. mainly appeals to feelings and emotions.
e.g: stress levels, general happiness levels