can be proven true/false
"A fall in supply of petrol will lead to an increase in its price"
3 of 20
normative statement
value judgements "should/oughts", opinions, ideas
"Working citizens should not pay for hospital care."
4 of 20
renewable resource
can be exploited over and over again because they have the potential tor renew themselves
Eg forests, fish stocks
(not scarce)
5 of 20
nonrenewable resource
once exported cannot be replaced
Eg coal, oil
6 of 20
the economic problem
scarcity + choice
resources have to be allocated between competing uses because wants are infinite whilst resources are scarce, forcing economic agents to make a choice
7 of 20
opportunity cost
every choice has a range of alternatives
the opportunity cost is the benefits forgone of the choice - a trade-off, sacrifice
8 of 20
PPF
Production Possibility Frontier : a curve showing the maximum potential output of an economy
movement along = change in choice...
shift= expansion/contraction of the production possibility of an economy
9 of 20
capital goods
goods used in production of other goods Eg factories, offices, roads
10 of 20
consumer goods
goods/services used by people to satisfy their needs /wants
eg food, holidays
11 of 20
specialisation
a particular area where someone concentrates in, becomes an expert
pros :saves time, more efficient = increase in productivity, allows workers to gain skill
cons: work can become robotic, repetitive , can feel alienated = less efficient , poorer qualit
12 of 20
division of labour
specialisation between individuals - performing different tasks at different stages of production to make a good/service
e.g working with others, a team
13 of 20
Specialisation & the division of labour
Adam Smith
breaks down large jobs into smaller jobs that are assigned to workers.
The division of labour creates a specialized knowledge of a task, saves labor time and increase productivity.
14 of 20
Functions of money - medium of exchange
directly swapping one good with another
15 of 20
a measure of value
unit of account
16 of 20
a method of deferred payment
people will lend money because they know they will roughly be able to buy the same amount of goods when its paid back
eg trade confidence
17 of 20
free market
market mechanism economies - limited government intervention
eg capitalist economies, Hong Kong is one of the freest market economies
Adam Smith, Friedrich Hayek
pros: individuals have more choice, stronger incentives to innovate, produce higher quality
18 of 20
mixed economics
both the market mechanism & government planning process allocate significant proportions of total resources
role of government - buying land, labor, and capital purchase goods and services in the product market.
Eg Uk - healthcare system administered &f
19 of 20
command economies
government controls the means of production, allocates resources in society
Eg North Korea, China
Karl Marx
pros: less inequality, low unemployment, common good vs profit priority
cons: lack of competition inhibits innovation, inefficiency, curbed po
20 of 20
Other cards in this set
Card 2
Front
the limited availability of a commodity
Back
scarcity
Card 3
Front
can be proven true/false
"A fall in supply of petrol will lead to an increase in its price"
Back
Card 4
Front
value judgements "should/oughts", opinions, ideas
"Working citizens should not pay for hospital care."
Back
Card 5
Front
can be exploited over and over again because they have the potential tor renew themselves
Eg forests, fish stocks
(not scarce)
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