Economics Key Terms - Page 16 Flashcards Preview

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Flashcards in Economics Key Terms - Page 16 Deck (20):
1

Choice

A decision between one or more alternatives

2

Scarcity

Resources are limited in supply, e.g. raw materials and time

3

Trade-off

Where the selection of one choice results in the loss of another

4

Opportunity cost

The loss of the next most desired alternative when choosing a particular course of action

5

Demand

The quantity of a good or service a consumer would like to buy at a given price in a time period

6

Price insensitivity

Where changing the price of a product by a certain amount leads to a smaller change in demand

7

Necessity

A good or service that a consumer views as vital

8

Substitute

A good or service which is a possible alternative to another good or service

9

Price sensitivity

Where changing the price of a good or service by a certain amount results in a loss of revenue

10

Stakeholders

Groups which are interested in the performance of a business

11

Shareholders

The owners of a limited company. They buy shares which represent part ownership of a company

12

Competition commission

The body which investigates cases where firms merge or are taken over to decide whether such activity is in the public interest. It has the power to prevent mergers or take-overs where these are seen to reduce the level of competition

13

Dividends

The payments made to shareholders from profits of a company

14

Third party

A group or an individual that is not directly involved in a decision

15

Externalities

The effects of an economic decision or individuals and groups outside who are not directly involved in the decision

16

Negative externalities

Those costs arising from business activity which are paid for by people or organisations outside the firm

17

Positive externalities

Those benefits arising from business activity which are experienced by people or organisations outside the firm. The firm receives no payment for the benefits received

18

Profits

The rewards of risk-taking. Profit is the difference between the amount of revenue earned by a fireman the total costs of producing the goods and services the business sells

19

Market share

The quantity sold by a business as a percentage of total sales in a market

20

Competitiiveness

The strength of a business's position in a market measured by market share and profitability. It reflects whether people are prepared to use the business over its rivals