Economics definitions

HideShow resource information
What is a normal good?
A good which when price increases, demand falls, one which has positive income elasticity of demand and one which as income rises, demand increases.
1 of 11
What is a subsidy?
A sum of money, granted by the government to a firm to reduce the costs of production, therefore shifting the supply curve to the left and hopefully increase consumption.
2 of 11
What is a market?
An environment which operates under the forces of supply and demand and allows buyers and sellers to interact so they can trade goods and services through the use of money or barter.
3 of 11
What is specialisation?
Specialisation is the production of a limited range of goods by an individual, firm or country in co-operation with others so that together a complete range of goods is produced.
4 of 11
What are 'positive statements'?
They are statements about economics which can be proven to be true or false. They can be supported or refuted by evidence.
5 of 11
What are 'normative statements'?
These are concened with value judgements. They cannot be supported or refuted Ultimately, they are opinions about how economics and markets should work. They often contain words like "should" and "ought"
6 of 11
Nominal values are expressed at current prices. What does this mean?
It means they have NOT been adjusted for inflation.
7 of 11
Real values are expressed at constant prices. What does this mean?
It means they HAVE been adjusted for inflation.
8 of 11
What is a private cost?
This is the cost of an activity to an individual economic unit, such as a consumer or firm.
9 of 11
What is a social cost?
A social cost is the cost of an activity, not just to the individual economic unit which creates the cost, but to the rest of society as well.
10 of 11
What is an externality?
A consequences of an economic activity that is experienced by unrelated third parties. They can be positive or negative.
11 of 11

Other cards in this set

Card 2

Front

What is a subsidy?

Back

A sum of money, granted by the government to a firm to reduce the costs of production, therefore shifting the supply curve to the left and hopefully increase consumption.

Card 3

Front

What is a market?

Back

Preview of the front of card 3

Card 4

Front

What is specialisation?

Back

Preview of the front of card 4

Card 5

Front

What are 'positive statements'?

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 »