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Microeconomics Y12 > Economic Systems > Flashcards

Flashcards in Economic Systems Deck (34):
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

Human 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

Once 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 labour and capital, taking risks, set up enterprise to make profit

23

Exchange

Process by which goods and services are traded

24

What are households

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

25

Commodities

Resources

26

Infrastructure

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

27

Land

All natural resources used in production

28

Labour

Productive contributions

29

How to enforce long term growth

Increase the size and efficiency of our factors of production

30

what do the factors of production earn

rent
wages
interest
profit

31

3 different types of economic system

free market
centrally planned
mixed economy

32

planned economy

gov controls the resources

33

free market

most efficient
gov tries not to intervene

34

mixed economy

fair and more efficient