AS Economics Chapter 1 Definitions

A statement of fact that can be scientifically tested to see if it is correct or incorrect.

A statement that includes a value judgement and can not be proved by just looking at the evidence.

Something that is necessary for human survival, such as food.

Something that is desirable such as fashionable clothing but is not necessary for human survival. 

The economic well being of an individual, a group within the society or economy.

A process for set of processes that converts inputs into ouput of goods.

A good which is used in the production of other goods or services. (Producer goods)

A good which is consumed by individuals or households to satisfy their needs and wants.

Inputs into the production process, such as land, capital, labour and enterprise.

A resourse such as oil, which is scarse and runs out as it is used. Also known as non-renewable resourses. 

A resource, such as timber that with careful management can be renewed as it is used. 

How best to make decisions about the allocation of scarse resources among competitive uses so as to improve and maximise human happines and welfare. 

Results from the fact that people have unlimited wants but resources to meet these wants are limited. In essence people would like to consume more goods and services then the economy is able tp produce with its limited resources. 

The cost of giving up the best next alternative.This can be shown on a PPF digram  (as more capital goods are being produced more consumer goods must be given up).

A curve depicting the various combinations of two products that can be produced when all the available resources are fully and efficiently employed. 

The increase oin the potential level of real output the economy can produce over a period of time. 

When all who are willind and able to work are employed. 

When not all of those who are willing and able to work are employed. 

Choosing between alternatives whne making a decision on how to use scarce resources.

The process through which the available factors of production are assigned to produce different goods and services. 

For the economy as the whole it occurs when it is imposible to produce more of one good without producing less of another. For a firm it occurs when the average total cost of production is minimised.

Occurs when the available economic resources are used to produce the combination of goods and services that best matches people's tastes and preferences.