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72 Cards in this Set
- Front
- Back
Capital |
goods/materials that are used for the production of other items. Not consumed in their own right. |
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Consumption |
Using up goods/services |
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Consumer Goods |
goods that are wanted because they provide satisfaction to their owner |
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Demerit Goods |
goods that are perceived to have a negative impact/effect on society/individuals |
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Economy |
Total value of goods & services produced & exchanged within a country. |
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Enterprise |
risk taking & decision making in business |
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Factors of Production (FOP) |
land, labour, capital, enterprise |
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Fixed Capital |
capital goods that do not need replacing in the short term (machinery, tools, buildings) |
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Free Goods |
goods that require no resources to make (wind, sunshine). |
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Goods |
items produced by the factors of production (usually for economic gain). |
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Labour |
the human effort (mental & physical) required to produce something. |
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Land |
the land we use/build on & resources that are contained in the land and water. |
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Market Economy |
an economy that has no government intervention in the allocation of resources & distribution of goods/services |
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Merit Goods |
goods that are perceived to provide positive externalities (beneficial to society) |
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Needs |
requirements for continued existence (food, clean water, shelter) |
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Opportunity Cost |
the cost of the next best alternative. |
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Production Possibility Curve (PPC) |
a graph that shows all of the different combinations of output that can be produced given current resources and technology. |
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Public Goods |
good provided by the government (paid for through taxes) that everybody benefits from (street lighting). |
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Resources |
items that are needed/ useful for consumption or the production of other items. |
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Scarcity |
limited availability of resources (ones that will run out eventually), not enough to satisfy all the wants. |
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Services |
something that fulfils a need, often not a physical object (banking, teachers, policemen). |
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Wants |
the desires that people have that are not necessary for their existence/ luxuries. |
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Working Capital |
capital products that are used up in the production process (raw materials). |
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Complimentary Goods |
goods that are purchased to support/go with another product (petrol & cars). |
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Contraction in Demand |
movement along the demand curve to the left (higher price & lower quantity demanded). |
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Contraction in Supply |
movement along the supply curve to the left (lower price & lower quantity supplied). |
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Demand |
want/willingness to buy a product. |
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Diminishing Marginal Utility |
consumption of additional units of a product provide less utility (satisfaction) each time. |
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Effective Demand |
the financial ability to actually purchase the product. |
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Elasticity |
the responsiveness of quantity supplied or demanded in relation to changes in price/income/other products. |
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Equilibrium |
the point at which the supply and demand curves cross/intersect |
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Excess Demand |
quantity demanded is greater than the quantity supplied at a given price. |
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Excess Supply |
quantity supplied is greater than quantity demanded at a given price. |
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Extension in Demand |
a movement along the demand curve to the right (lower price & higher quantity demanded). |
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Extension in Supply |
a movement along the supply curve to the right (higher price & higher quantity supplied). |
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External Costs |
costs of production that have to be paid by someone other than the firm/individual (cleaning up pollution). |
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External Benefits |
benefit of production to others outside the firm/individual (1st aid training for employees) |
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Individual Demand |
the amount a single person would be willing to buy at a range of prices. |
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Inferior Goods |
goods that consumers demand less of as incomes increase due to them opting to buy higher quality alternatives. |
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Marginal Utility |
the additional satisfaction gained from the consumption of an extra unit of a product. |
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Market Demand |
total demand for a product |
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Price elastic demand |
a % change in price results in greater % change in quantity demanded. |
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Price inelastic demand |
a % change in price results in smaller % change in quantity demanded. |
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Price elastic supply |
a % change in price results in greater % change in quantity supplied. |
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Price inelastic supply |
a % change in price results in smaller % change in quantity supplied. |
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Private costs |
the costs that the company/individual has to pay for production (labour, raw materials). |
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Private benefits |
the benefits to the company/individual of production (profits). |
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Social costs |
private costs + external costs |
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Social benefits |
private benefits + external benefits |
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Substitute goods |
goods that can be used as a substitute/alternative for a product (butter & margarine). |
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Supply |
the number of goods/services firms are able & willing to supply at a range of prices. |
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Unitary elasticity |
% change in price results equal % change in quantity demanded or supplied. |
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Utility |
the satisfaction gained from consuming a product. |
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Barter |
system of trade through swapping items. |
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Cash |
notes, coins and debit cards. |
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Central bank |
the government's bank, responsible for issuing money, setting interest rates. |
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Checking account |
Instant access account, see current account. |
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Commercial bank |
High St bank (HSBC etc) offering a range of accounts to individuals and businesses. |
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Credit card |
electronic payment card that allows users to make purchases with borrowed money that can be paid at a later date. |
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Current account |
instant access account used for routine/regular transactions. |
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Debit card |
electronic payment card linked to current/checking account that has the funds to make the transaction. |
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Disposable income |
the money available after paying taxes that you can choose how to use. |
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Liquidity |
the ability for and item/asset to be exchanged for cash with no loss of value. |
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Money |
commodity that is universally accepted for as payment for all goods and services. |
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Money Supply |
the sum of the notes, coins and deposits in banks & financial institution. |
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Piece rate |
payment based on quantity produced (fruit picking etc) |
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Salary |
Annual payment total that is paid monthly. |
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Specialisation |
Working on specific stage/stages of production in the aim of increasing productivity & lowering costs. |
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Stock exchange |
organisation that facilitates the buying and selling of shares in Public & Private Limited Companies. |
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Trades union |
organisation of workers that negotiate wages, working conditions & hours. Collective bargaining. |
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Wages |
hourly rate for labour, often calculated weekly. |
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Wealth |
collection of assets (houses, land, shares in companies, money saved in bank accounts). |