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Microeconomics Y12 > Definitions > Flashcards

Flashcards in Definitions Deck (38):
1

Basic economic problem

Deciding how to satisfy infinite wants from finite resources

2

Economic goods

Have an element of scarcity and value- people will pay for them

3

Free goods

No opportunity cost- not scarce

4

Needs

Goods or services that are required

5

Wants

Goods or services that are not necessary but that we desire for

6

Factors of production

The resources required in order to produce goods and services

(Land labour capital enterprise)

7

Economic agents

Households- consumers workers
Businesses
Government
Resources

8

Normative statement

Subject statements, that carry value judgments

9

Positive judgment

Objective statements that can be tested

10

Physical capital

Buildings and machinery

11

Financial capital

Assets

12

Hunan capital

Labour (Human Resources used in production)

13

Social capital

Infrastructure (man made environment used In production of goods and services)

14

Consumer goods

Satisfy wants and needs

15

Producer goods

Produce things for future- machines

16

Renewable

Replaces itself naturally

17

Non renewable

One used fine forever

18

Private sector

Business enterprises

19

Public sector

Government owned

20

Voluntary sector

Charities- to help people

21

Opportunity cost

the next best alternative foregone

22

Entrepreneur

Somebody who organises Land marbled and capital, taking risks, set up enterprise to make profit

23

Exchange

Process by which goods and services are traded

24

Specialisation

Concentration by a worker (or workers, firm, region or whole economy) on a narrow range of goods and services

25

Division of labour

Dividing production into different sections

26

Benefits of specialisation

Increase in output
Increase in efficiency
Increase in productivity
Improved quality

27

Negatives of specialisation

Boring and repetitive
Mistakes if workers lose motivation

28

What is a production possibility curve

An illustration of the trade offs facing an economy that produces only 2 goods

29

What is a trade off

losing one quality in return for gaining another

30

What is Ceretis paribus

Everything else is equal

31

Assumption s underlying PPC

Fixed labour hours
Fixed productivity
Fixed level of technology

32

What are households

Individuals who live in the same dwelling and whose spending decisions are connected

33

Commodities

Resources

34

Infrastructure

Stock of underlying capital used to support the economics system (man made environment)

35

Land

All natural resources used in production

36

Labour

Productive contributions

37

How to enforce long term growth

Increase the size and efficiency of our factors of production

38

Planned economy

Government controls resources