Economics Section A definitions

HideShow resource information
Market
A set of arrangements allowing buyers and sellers to communicate and exchange goods and services.
1 of 53
Product market
Markets selling goods and services from which consumers derive utility (benefit).
2 of 53
Commodity market
Markets selling raw materials or minerals used in the production of other goods and services.
3 of 53
Labour market
Markets selling labour time used in the production of goods and services.
4 of 53
Supply
The amount of a good that sellers are prepared to sell at given prices over a period of time.
5 of 53
Demand
The amount of a good that will be bought at given prices over a period of time.
6 of 53
Price
The amount of money that goods are exchanged for in a transaction
7 of 53
Exporters
Firms that sell overseas
8 of 53
Effective demand
A want backed up the the ability to pay
9 of 53
Normal good
A good for which demand will rise if income rises and fall if income falls.
10 of 53
Inferior good
A good for which demand will fall if income rises or rise if income falls.
11 of 53
Fixed supply
The amount of supply is fixed (the supply curve is vertical).
12 of 53
Indirect tax
Taxes imposed by the government on spending.
13 of 53
Market equilibrium
Where the supply of a good or service exactly equals its demand in a market.
14 of 53
Excess supply
Where supply is greater than demand and there are unsold goods in the market.
15 of 53
Excess demand
Where demand is greater than supply.
16 of 53
Price elasticity demanded
The responsiveness of quantity demanded for a good to change in price
17 of 53
Elastic demand
A change in price results in a proportionally greater change in demand
18 of 53
Inelastic demand
A change in price results in a proportionally smaller change in demand
19 of 53
Price elasticity of supply
The responsiveness of supply for a good to a change in price.
20 of 53
Elastic supply
A change in price results in a greater change in supply
21 of 53
Inelastic supply
A change in price results in a proportionally smaller change in supply
22 of 53
Income elasticity of demand
The responsiveness of demand to a change in income.
23 of 53
Real income
The spending power of income- the amount of goods and services which can be purchased with one’s normal income.
24 of 53
Elastic income
When the YED is more than 1 or less than -1. Meaning that the % change in quantity demand is more than the % change in real income.
25 of 53
Inelastic income
When the YED is in between +1 and -1. Meaning that the % change in quantity demand is less than the % change in real income.
26 of 53
Luxury good
Luxury goods are products that people want but don’t need. Consumers will only buy them if they can afford them because they are a discretionary good. This means that if there is a decrease in income, demand would fall because people will stop purcha
27 of 53
Necessity good
Necessities are goods that people need, so even if income falls, people will have to continue buying the necessity goods. This means that necessities are YED inelastic.
28 of 53
Discretionary expenditure
Non-essential spending or spending that is not automatic
29 of 53
Unitary elasticity
Where price elasticity of demand for a product is equal to 1. For such a product total revenue is exactly the same at all prices. Unitary demand curves are curved.
30 of 53
Finite resources
Resources that will eventually run out
31 of 53
Scarce resources
The amount of resources available is limited.
32 of 53
Basic economic problem
Allocation of a nation’s scarce resources between competing uses that represent infinite wants.
33 of 53
Opportunity cost
When choosing between different alternative is the benefit lost from the next best alternative. For example, if a company has $10000 dollars to spend on either advertising or training the workforce. If they chose to spend it on training the workforc
34 of 53
Production possibility curve
A line which shows the different combinations of two goods an economy can produce if all resources are used up.
35 of 53
Economy
A system that attempts to solve the basic economic problem.
36 of 53
Public sector
Government organisations that provide goods and services in an economy.
37 of 53
Private sector
The provision of goods and services by businesses that are owned by individuals or groups of individuals.
38 of 53
Public goods
Goods that are not likely to be provided by the private sector.
39 of 53
Merit goods
Goods which are under-provided by the private sector
40 of 53
A mixed economy
An economy where goods and services are provided by both the private and the public sectors.
41 of 53
Efficiency
Minimising cost and the use of resources
42 of 53
Market failure
Where markets lead to inefficiency.
43 of 53
Labour
The people available for work in a country represent the working population.
44 of 53
Working population
Those people who are in work or seeking work
45 of 53
Specialisation
The production of a limited range of goods by individuals, firms, regions or countries.
46 of 53
Division of labour
The breaking down of the production process into smaller parts with each worker allocated to a specific task.
47 of 53
Demand for labour
The quantity demanded of labour at a given wage rate.
48 of 53
Supply of labour
The quantity supplied of labour at a given wage rate.
49 of 53
Wage rate
The amount of money paid to workers for their services over a period of time
50 of 53
Derived demand
Demand that arises because there is demand for another good.
51 of 53
Minimum wage
A minimum amount of money per hour which most workers are entitled to be paid.
52 of 53
Trade unions
Trade unions are organisations that exist to protect the interests of workers.
53 of 53

Other cards in this set

Card 2

Front

Product market

Back

Markets selling goods and services from which consumers derive utility (benefit).

Card 3

Front

Commodity market

Back

Preview of the front of card 3

Card 4

Front

Labour market

Back

Preview of the front of card 4

Card 5

Front

Supply

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Section A economics resources »