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19 Cards in this Set
- Front
- Back
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What does ceteris parabus mean |
All other factors staying the same |
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What is a value judgement |
Assessment of good or bad in terms of priorities |
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How do value judgements influence economic decision making |
Economists have to make choices that lead to uncertain outcomes using value judgements |
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What is the central purpose of economic activity |
Production of goods and services to satisfy needs and wants |
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What are the 3 key economic decisions |
What to produce How to produce Who is to benefit from the goods and services produced |
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What are economic agents |
Individuals and firms that partake in economic activity |
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What are the four factors of production |
Land Labour Capital Enterprise |
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What is the value of a worker called |
Human capital |
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What does capital refer to as a factor of production? Give examples |
Man-made aids used in production E.g. machinery, tools, offices |
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What usually is enterprise, as a factor of production |
An entrepreneur |
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What does natural resource economics look at |
Demand, supply and allocation of the worlds natural resources |
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What is the fundamental economic problem |
Limited resources, unlimited wants |
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Why do choices have to be made about how certain resources are allocated |
A lot of resources are scarce |
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What is opportunity cost |
The benefit lost of the next best alternative when making a choice |
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What does PPC stand for What does it show |
Production possibility curve Show different features of the fundamental economic problem: resource allocation, opportunity cost and trade-offs, unemployment of economic resources |
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What points on a ppc graph are productively efficient |
Anywhere on the curve |
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Where would allocative efficiency be found on a ppc graph and when does it happen |
At one specific point on the curve It happens when social welfare is maximised - takes into account the wants of consumers e.g. demand for one product over another |
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What is it called if you are operating inside the ppc |
Productive inefficiency |
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What would the ppc shifting outwards and to the right suggest and what would it mean for production |
Economic growth An increase in productive capacity |
