Key terminology

HideShow resource information
Economic Problem
how to allocate scarce resources among alternative uses
1 of 55
Household
a group of people whose spending decisions are connected
2 of 55
Microeconomics
the study of how households and firms make
3 of 55
Factor of production
the resource inputs that are available in an economy
4 of 55
Goods
tangible products
5 of 55
Services
intangible products
6 of 55
Land
natural resources in an economy
7 of 55
Labour
the quantity and quality of human resources
8 of 55
Capital
man-made aids to production
9 of 55
Entrepreneurship
the willingness of an entrepreneur to take risks and organise production
10 of 55
Entrepreneur
someone who bears the risks of the business and who organises production
11 of 55
Factor Endowment
the stock of factors of production
12 of 55
Production
the output of goods and services
13 of 55
Scarcity
a situation where there are insufficient resources to meet all wants
14 of 55
Choice
the selection of appropriate alternatives
15 of 55
Opportunity cost
the cost of the next best alternative foregone
16 of 55
Specialisation
the concentration by a worker or workers, firm region or whole economy on a narrow range of goods and services
17 of 55
Exchange
the process by which goods and services are traded
18 of 55
Subsidy
a payment by a governing body to encourage the production or consumption of a product
19 of 55
Division of Labour
the specialisation of labour where the production process is broken down into separate tasks
20 of 55
Productivity
output, or production of a good or service, per worker
21 of 55
Production Possibility Curve
this shows the maximum quantities of different combinations of output of two products, given current resources and state of technology
22 of 55
Trade-off
the calculation involved in deciding on whether to give up one good for another
23 of 55
Economic Growth
change in the production potential of an economy
24 of 55
Productive Potential
the maximum output that an economy is capable of producing
25 of 55
Economic System
the way in which production is organised in a country or group of countries
26 of 55
Market Economy
an economic system whereby resources are allocated through the market forces of demand and supply
27 of 55
Price System
a method of allocating resources by the free movement of prices
28 of 55
Command economy
an economic system in which most resources are state owned and also allocated centrally
29 of 55
Mixed Economy
an economic system in which resources are allocated through a mixture of the market and direct public sector involvment
30 of 55
Aggregate Demand
the total demand for a country's goods and services at a given price level and in a given time period
31 of 55
Aggregate Supply
the total amount that producers in an economy are willing and able to supply at a given price level in a given time period
32 of 55
Allocative efficiency
where consumer satisfaction is maximised
33 of 55
Arithmetic Mean
the sum of the items divided by the number of items
34 of 55
Asymmetric information
information not equally shared between two parties
35 of 55
Automatic Stabilisers
forms of government spending and taxation that change automatically to offset fluctuations in economic activity
36 of 55
Average Propensity to Consume
the proportion of disposable income spend. It is consumer expenditure divided by disposable income
37 of 55
Average Propensity to Save
the proportion of disposable income saved. It is saving divided by disposable income
38 of 55
Balance of Payments
a record of money flows coming in and out of a country
39 of 55
Capacity Utilisation
the extent to which firms are using their capital goods
40 of 55
Ceterus Paribus
assuming all other variables remain unchanged
41 of 55
Circular Flow of Income
the movement of spending and income throughout the economy
42 of 55
Complements
goods for which there is joint demand
43 of 55
Consumer Confidence
how optimistic consumers are about future economic prospects
44 of 55
Consumer Price Index
a measure of changes in the prices of a representative basket of consumer goods and services
45 of 55
Corporation Tax
a tax on firms' profits
46 of 55
Cost-push Inflation
increases the price level caused by increases in the cost of production
47 of 55
Cross elasticity of Demand
the responsiveness of demand for one product in relation to a change in the price of another product
48 of 55
Current Account Deficit
when more money is leaving the country than entering it, as a result of sales of its exports, income and current transfers going abroad
49 of 55
Cyclical unemplyment
unemployment arising from a lack of aggregate demand
50 of 55
Deflation
a sustained fall in the general price level
51 of 55
Demand-pull Inflation
increases in the price level caused by increases in aggregate demand
52 of 55
Demerit Goods
their consumption is more harmful than is actually realised
53 of 55
Direct Taxes
one that taxes the income of people and firms that cannot be avoided
54 of 55
Economic Cycle
the tendency for economic activity to fluctuate outside its trend growth rate moving from a boom to a recession
55 of 55

Other cards in this set

Card 2

Front

Household

Back

a group of people whose spending decisions are connected

Card 3

Front

Microeconomics

Back

Preview of the front of card 3

Card 4

Front

Factor of production

Back

Preview of the front of card 4

Card 5

Front

Goods

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 All topics resources »