Key Terms F581 - Chapter 1

Key Terms unit 1

HideShow resource information
the study of how to allocate scarce resources in the most effective way
1 of 38
Economic Problem
how to allocate scarce resources among alternative uses
2 of 38
group of people whose spending decisions are connected
3 of 38
the study of how households and firms make decisions in markets
4 of 38
the study of issues that affect economies as a whole
5 of 38
a simplified view of reality that is used by economists as a means of explaining economic relationships
6 of 38
Factor of production
the resource inputs that are available in an economy for the production of goods and services
7 of 38
tangible products, i.e. products that can be seen and touched, such as cars, food and washing machines
8 of 38
intangible products, i.e. products that cannot be seen or touched, such as banking, beauty therapy and insurance
9 of 38
natural resources in an economy
10 of 38
the quantity and quality of human resources
11 of 38
man-made aids to production
12 of 38
the willingness of an entrepreneur to take risks and organise production
13 of 38
someone who bears the risk of the business and who organises production
14 of 38
Factor endowment
the stock of factors of production
15 of 38
the output of goods and services
16 of 38
anything you would like, irrespective of whether you have the resources to purchase it
17 of 38
a situation where there insufficient resources to meet all wants
18 of 38
the selection of appropriate alternatives
19 of 38
Opportunity Cost
the cost of the (next) best alternative, which is foregone when a choice is made
20 of 38
the concentration by a worker or workers, firm, region or whole economy on a narrow range of goods and services
21 of 38
the process by which goods and services are traded
22 of 38
a payment by a governing body to encourage the production or consumption of a product
23 of 38
Division of labour
the specialisation of labour where the production process is broken down into separate tasks
24 of 38
output, or production of a good or service, per worker
25 of 38
Production possibility curve
this shows the maximum quantities of different combinations of output of two products, given current resources and the state of technology
26 of 38
Developed economy
an economy with a high level of income per head
27 of 38
Developing economy
an economy with a relatively low level of income per head
28 of 38
the calculation involved in deciding on whether to give up one good fro another
29 of 38
Economic growth
change in the production potential of an economy
30 of 38
Productive potential
the maximum output that an economy is capable of producing
31 of 38
Economic system
the way in which production is organised in a country or group of countries
32 of 38
Market economy
an economic system whereby resources are allocated through the market forces of demand and supply
33 of 38
Price system
a method of allocating resources by the free movement of prices
34 of 38
the quantity of a product that producers are willing and able to provide at different market prices over a period of time
35 of 38
the quantity of a product that consumers are able and willing to purchase at various prices over a period of time
36 of 38
Command economy
an economic system in which most resources are state owned and also allocated centrally
37 of 38
Mixed economy
an economic system in which resources are allocated through a mixture of the market and direct public sector involvement
38 of 38

Other cards in this set

Card 2


Economic Problem


how to allocate scarce resources among alternative uses

Card 3




Preview of the front of card 3

Card 4




Preview of the front of card 4

Card 5




Preview of the front of card 5
View more cards


No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Reasons for Individuals, organisations and societies having to make choices resources »