Keywords Flashcards
What is producer surplus?
The price in which a firm receives and the price in which they are willing to supply it to the market.
What is consumer surplus?
The difference between how much a buyer is willing to pay for a good and what they actually pay.
What is demand?
The quantity of goods or services that will be bought at any given price over a period of time
What is supply?
The quantity of goods or services firms are willing and able to sell at a given price over a given time period.
What is the equilibrium price?
The price at which quantity demanded is equal to the quantity supplied. All goods are sold and no buyer is left frustrated.
What is positive economics?
Deals with objectives or scientific explanations of the economy.
What is positive statements?
Statements that are value free and they can be proved or disproved.
What is normative economics?
Attempts to describe what ought to be.
What is normative statements?
Contain a value judgement and cannot be scientifically proved or disproved.
What is a production possibility frontier?
It’s a curve or boundary which shows the combination of two or more goods and services that can be produces whilst using all the available factor resources efficiently.
What is an interest rate?
The cost of borrowing money or the return for investing money.
What is an opportunity cost?
It’s the benefit lost from the next best alternative forgone.
What is capital?
Investment in goods which are used to produce other goods in the future.
What is GDP?
It’s the monetary value of all goods and services produced with the UK in a given time period.
What is an enterprise?
The activity of an entrepreneur. An entrepreneur is an individual who seeks to supply products to a market for a rate of return.
