introduction Flashcards
chapter 1
economics def.
is a social science which studies the allocation of scarce resources
what is a need
it´s immediate. (e.g. food, shelter ) We need it to survive
what is a want
anything in excess of needs which is not necessary for our survival (e.g. foreign holidays)
what is opportunity cost
the cost of foregone alternatives (choice)
i.e. the product you don´t buy
what is a deductive theory
it starts with a hypothesis that wie believe is true, and is then applied to a certain situation.
e.g. all animals will die
a rabbit is an animal
all rabbits will die
what is a inductive theory
one collects data and looks for a pattern, from which a conclusion is drawn.
e. g. sb. examinates attendance at 40 football grounds
pattern: a 50% drop on Tuesday games
conclusion: Tuesday is a bad day for football games.
what are the 4 factors of production
land, labour, capital, enterprise
what are the 4 factors of production in an cafe?
land: ingredients like milk, cheese, ham,…
labour: workers (human effort)
capital: man-made (fridge, machinery,…)
enterprise: the owner (takes the initiative and bears the risk involved in setting up a business.
what is a market.
a market is where buyers and sellers meet.
what are the 3 main types of markets?
factor market, intermediate market, final market
3 different economic systems
free enterprise,
command/centrally planned economy
mixed economy
a free enterprise economy
is where private businesspeople make the decisions on the goods and services to be produced. (capitalist system)
e.g. US
a command/centrally planned economy
is where the government makes the decisions on the goods and services to be produced (communist/socialist system)
e.g. cuba, North Korea
a mixed economy
is one that incorporates elements of both central planning and private enterprise in it’d economic system
e.g. ireland
prove that Ireland has a mixed economy system
RTE is government owned and Dunnes Stores is privately owned
