economics foundations

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

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

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

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

a necessity a human has to have e.g water

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

people or organisations that use and perchase economic goods and services 

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

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

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

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 

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

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

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

is where all our wants cant be satisfied 

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

the advantage of a choice 

the expenses of a choice

is an option for the use of selected scarse resources 

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

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

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

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

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

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

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

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

includes notes and coins but also savings and deposits 

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

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

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

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

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

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

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

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

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

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 

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

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

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

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

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

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

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

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

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

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

AD=C+I+G+X-M

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

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

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