Basic Economic Principles And Terms Flashcards Preview

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Flashcards in Basic Economic Principles And Terms Deck (34):
1

What is a stakeholder?

An individual or group with a particular interest or influence on a particular activity

2

What are the four main stakeholders

Government
Firms
Workers
Consumers

3

What is GDP?

The value of goods and services provided by the economy

4

What outcomes do the governement want from the economy?

Good welfare and high quality of life for their population
Taxes paid honestly
An increasing GDP
Foreign investment

5

What outcomes do consumers want from the economy?

A wide range of products
Low prices and VAT
Readily available goods

6

What outcomes do workers want from the economy?

Fair working hours
Work-life balance
A variety of oppurtunities such as promotion
A good wage
Lower income taxes
Job security

7

What outcomes do firms want from the economy?

Cost effective workers to decrease unit costs
Lower coorporation tax
Higher sale revenue
Minimum costs
Maximise profit

8

What are the factors of production and what do they mean?

Land
Labour
Capital
Enterprise

9

What is land and give examples

An area of available natural resources to produce products e.g fertile land, minerals, fish forestry

10

What is labour and what is the reward for it?

People available to work and do tasks, reward is wages

11

What is capital and what is the reward from it?

Capital is the stock of goods to make other goods like machinery. The reward is interest

12

What is enterprise and what is its reward?

Enterprise brings the other factors of production together into a complete production - 'risk taker'. The reward is profit

13

What is the reward that comes from land?

Rent

14

How can capital be improved?

Technological advances, servicing and looking after equipment

15

How can enterprise be improved?

By having more information to help inform descions

16

How can we improve the use of land?

By using renewable resources like water

17

How can labour be improved so production capacity is increased?

Division
Education

18

What is the productive capacity?

When the maximum amount of the factors of prosuction are combined in their most efficient way

19

What is oppurtunity cost?

The next best alternative lost as a result of a person / group of people taking their first choice option

20

What are economic goods?

Goods which are scarce and therefore have an oppurtunity cost

21

What are free goods?

Goods which have no oppurtunity cost

22

What are capital goods?

Business goods which produce other goods and services

23

What are consumer goods?

Goods which are used up

24

What is economics?

The study of production, distribution and consumption of wealth in human society

25

What are the three aspects of the economic problem?

Limited/scarce resources
Production
Unlimited wants and needs

26

What is a PPF?

A production possibility frontier

27

How does a PPF demonstrate oppurtunity cost?

It compares the production of two products at their maximums.
It allows you to see what is lost somewhere else on the curve

28

In a curved PPF, why doesn't the oppurtunity cost remain the same along the curve?

Because the production of two products aren't identical
And not all inputs are equally suited

29

When might PPFs shift outwards?

If population increases
Employment rate increases
Technology advances

30

When might PPFs shift inwards?

Population decrease

31

Which exonomic concepts can the PPF model illustrate?

Oppurtunity cost
Workforce
Factors of production

32

What does reallocating scarce resources from ome product to another involve?

An opportunity cost

33

What allows countries to consume beyond their own PPF?

Trade

34

If both goods in a PPF were produced more, what would this represent?

An improvement in welfare
A gain in allocative efficiency