Micro Economics Definitions.1

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Positive Statement
A statement of fact that can be scientifically tested to see whether it is correct or incorrect
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Normative statement
This is a statement that includes a value judgement
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Need
Something that is necessary for human survival
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Want
Something that is desirable
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Economic welfare
The economic well-being of an individual, a group or an economy
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Production
A process which converts inputs into outputs of goods
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Capital good
A good which is used in the production of other goods or services
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Consumer good
A good which is consumed by an individual to satisfy their needs or wants
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Factors of production
Land, Labour, Capital, Enterprise
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Finite resource
These are resources which are scarce and run out as it is used
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Renewable resource
These are resources that with careful management can be renewed as it is used
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Fundamental economic problem
This is how best to make decisions about the allocation of scarce resources among competing uses so as to improve and maximise human welfare and happiness
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Scarcity
This results from the fact that people have unlimited wants yet there are finite resources
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Opportunity cost
This considers the next best alternative forgone
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Production Possibility Frontier
This is a curve which depicts the various combinations of two products that can be produced when all the available resources are fully and efficiently employed
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Economic growth
The increase in potential level of real output the economy can produce over a period of time
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Full employment
When all those who are able and willing to work are employed
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Unemployment
When not all those who are willing and able to work are employed
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Productive Effiency
This occurs when it is impossible to produce more of one good without producing les of another
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Allocative Efficiency
This occurs when the available economic resources are used to produce the combination of goods and services best matched to people's tastes and preferences
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Other cards in this set

Card 2

Front

This is a statement that includes a value judgement

Back

Normative statement

Card 3

Front

Something that is necessary for human survival

Back

Preview of the back of card 3

Card 4

Front

Something that is desirable

Back

Preview of the back of card 4

Card 5

Front

The economic well-being of an individual, a group or an economy

Back

Preview of the back of card 5
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