Econs Flashcards
(24 cards)
Scarcity
When limited resources are not enough to satisfy unlimited wants.
Opportunity Cost
The next best opportunity foregone when an economic decision is made.
Factors of Production
Inputs used to produce goods/services: land, labour, capital, and enterprise.
Demand
The quantity of a good or service consumers are willing and able to buy at a given price.
Supply
The quantity of a good or service that producers are willing and able to sell at a given price.
Market Equilibrium
The point where demand equals supply, setting the market price.
Price Elasticity of Demand (PED)
Measures how much demand changes in response to a change in price.
Market Failure
When the market does not allocate resources efficiently or fairly.
Externalities
Side effects of production/consumption on third parties not involved in the transaction.
Subsidy
Financial help from the government to encourage production or consumption.
Indirect Tax
A tax placed on goods/services, paid via producers (e.g. VAT, sales tax).
Specialisation
Concentrating on producing one good or service to increase efficiency.
Economies of Scale
Cost advantages gained by increasing production, lowering average costs.
Unemployment
When people willing and able to work are unable to find jobs.
Inflation
A sustained increase in the general price level in an economy.
Fiscal Policy
Government policy on spending and taxation to influence the economy.
Monetary Policy
The use of interest rates and money supply to influence economic activity.
Gross Domestic Product (GDP)
The total value of all goods and services produced in a country in one year.
Exchange Rate
The value of one currency compared to another.
Tariff
A tax on imports to protect domestic industries or raise revenue.
Protectionism
The use of trade barriers by a country to restrict imports and protect domestic industries from foreign competition.
Purchasing Power
The amount of goods and services that a unit of currency can buy.
Externalities
Externalities are the positive or negative side effects of economic activities that affect third parties who are not directly involved in the transaction.
