Economics Definitions Flashcards
Give the definition of Economics?
“Economics is the study of the relationship between many wants and scarce resources which have alternative uses”
Name 3 primary factors of production?
Land
Labour
Capital
Draw a diagram of Maslow’s hierarchy of needs clearly indicating each level? (3)
Self-Actualisation Esteem: Respect Belonging: Family and Friends Safety: Shelter and Security Physiological: Food and Water
Name 3 current economic problems facing national governments?
- Inflation
- Unemployment
- Economic Growth
- Balance of Payments
- Environmental issues
- Debt
What is the difference between Scarcity and Rareness?
Scarcity is the relationship between human wants and the scarcity of resources which have alternative uses in the very essence of economics.
Scarcity vs Rareness - Oil vs Mona Lisa
(scarce: wanted by many) - ( rare: only one)
Give two examples of Capital goods
- Machinery
- Buildings
- Office fittings and equipment
Define “Consumption”?
Consumption is the purchase by an individual or family of the goods and services supplied by firms
Define “Production”?
Production is the provision of goods and services through combining the factors of production ie land, labour and capital in a firm.
What is the difference between Actual and Latent demand?
“Demand is the willingness to and ability to pay for a particular good or service”
Actual vs Latent
Bread vs Ferraris
need bread to survive vs don’t need a Ferrari to survive.
What do you understand by the term “productive capacity” when applied to a country?
It is the total amount of goods or services that the country is capable of producing if all the factors of production are used maximally
Define “Investment”?
Is an increase in a stock of physical assets over a period of time.
Give two sources of investment monies?
- Savings
- Taxes
- Foreign Bankers
- Government loans
Who is the “Old Lady of Threadneedle Street”?
The Bank of England
