economics foundations

  • Created by: bcarey16
  • Created on: 08-11-19 11:45


The study of a choice and decision making in a world of limited resources

1 of 51

Resource Alloation

How scarce resources (factors of production) are distributed amoung producers (business), and how scarce goods and services are appointed amoung consumers (consumers)

2 of 51


tangiable items (physical products) that can be seen or touched to satisfy humans 

3 of 51


intangiable items that can satisfy human neds and wants, e.g a bus journey

4 of 51


a necessity a human has to have e.g water

5 of 51


isnt a necessity but is something a consumer would like to have 

6 of 51


people or organisations that use and perchase economic goods and services 

7 of 51


people or organisations who create and supply goods or services for sale 

8 of 51


a group of people who have the authority to govern a country 

9 of 51

Economic Problem

how best to use limited resources to satisfy the unlimited wants of people 

10 of 51

Infinite Wants

people are never totally satisfied with the quantity and variety of goods and services that they consume. Theres always something else they would need or want 

11 of 51

Limited Resources

resources that are finite- this means that there are only so many of them 

12 of 51

Finite Resources

resources that cant be renewed e.g plastics, crude oil, coal and fossil fuels 

13 of 51

Renewable Resources

commodities such as solar energy, oxygen, fish stocks or forestry that is inexhaustible or replaceable after time 

14 of 51


is where all our wants cant be satisfied 

15 of 51


where there are limited resources there will be competing uses for resources so the next best alternative will have to be discarded 

16 of 51


the advantage of a choice 

17 of 51


the expenses of a choice

18 of 51

Economic Choices

is an option for the use of selected scarse resources 

19 of 51

Oppotunity Costs

is the benefit of the next best alternative foregone when making a choice 

20 of 51

Economic Sustainability

the best use of our resources in order to create responsible development or growth, now and into the future 

21 of 51

environmental Sustainability

the impact of development or growth where the effect on the environment is small and possible to mannage, now and into the future 

22 of 51

Social Sustainability

The impact of development or growth that promotes the improvement in quality of life for all, now and in the future 

23 of 51


anything that is accepted as a means of payment for goods and services 

24 of 51

Medium of Exchange

anything that sets the standard of value of goods and services acceptibe to all those in the transaction

25 of 51

Money Supply

the total ammount of money in circulation, made up of cash and bank deposits 

26 of 51

Narrow Money

money that can be used as a medium of exchange; generally notes coins and certain bank balances 

27 of 51

Broad Money

includes notes and coins but also savings and deposits 

28 of 51


the ability of an item to be used as or directly converted into cash

29 of 51

Factors of Production

The scarce resources (inputs) used to produce output of finished goods and services 

30 of 51


man mae goods used to produce more goods including factories (plant) , machines and roads in the production process 

31 of 51


an entrepreneur risks financial capital (money) and organises land labour and captal in the production process to produce output in the hope of profit 

32 of 51


the physical and mental work of people weather by hand, by brain, skilled or unskilled in the production process 

33 of 51


all natural resources (gifts of nature) including feilds, mineral wealths and fishing stocks 

34 of 51


where a country/ firm/ worker focuses on a particular task within the production process in order to gain greater efficiancy 

35 of 51

Division of Labour

dividing a job into many specialised parts, with a single worker or few workers assigned to a particular task in the production process 

36 of 51

Primary Sector

this involves extraction of natural resources and raw materials for industry. e.g. agriculture forestry and fishing 

37 of 51

Secondary Sector

this involves the production of goods in the economy, i.e. transforming raw materials into finished goods. Both consumer and capital goods are made. e.g manifacturing and the construction industry 

38 of 51

Tertiary Sector

this sector provides services e.g. Banking, finance, insurance, retail, education, travel and tourism 

39 of 51

Chain of Production

the stages that the product goes through from the raw materials to the consumer receving the finished product 

40 of 51

Adding Value

This is the difference between the selling price and the costs of the imput used to make the product 

41 of 51


is the dependence of two or more people or things on each other 

42 of 51

Economic Growth

measures the increase in economic activity of an economy over a period of time 

43 of 51


Gross Domestic Product is the value of all gooods and services (output) produced within an economy over a given period of time 

44 of 51

Circular Flow of Income

is an economic model that dipicts how money flows around the economy 

45 of 51


Income and expenditure (spending) entering the circular flow of the economy 

46 of 51


income and expenditure (spending) that leaves the circular flow of the economy

47 of 51

Aggregate Demand

the total spending on domestic goods and services produced in the economy 


48 of 51

National Income

The total value of the economy as measured by the incomes recieved in that economy 

49 of 51


Any increase in spending in the economy will give a bigger overall increase in income 

50 of 51



51 of 51


No comments have yet been made

Similar Economics resources:

See all Economics resources »See all economic foundations resources »