micro

Question 1

scarcity

Answer 1

having unlimited wants, but limited resources

Question 2

trade off

Answer 2

all points on PPC

Question 3

what is economics

Answer 3

social science concerned with the efficient use of scare resources to achieve maximum satisfaction of economic wants

(study of how individuals and societies deal with scarcity)

Question 4

what is microeconomics

Answer 4

study of small economic units such as individuals firms and markets

Question 5

examples of micro economics

Answer 5

supply and demand in specific industries, production costs, labour markets

Question 6

what are economic goods

Answer 6

most goods are scarce they normally command a price - they have monetary value

Question 7

what are free goods

Answer 7

some goods are not seen to be scarce - there is no opportunity cost or rivalry to consume them

Question 8

what is a positive statement

Answer 8

a statement which is based on factual evidence which can be tested. they are objective

Question 9

what is a normative statement

Answer 9

a statement which is based off opinions or value judgements. they are subjective

Question 10

what is a need

Answer 10

a need is something that is necessary for life - it’s something that you have to consume to survive or live in society

Question 11

what is a want

Answer 11

a want is something that an individual may like to consume but it isn’t absolutely necessary

Question 12

what is scarcity

Answer 12

scarcity means that choices have to be made. we can’t satisfy all of our wants. individuals, organisations and governments all have to prioritise their consumption

Question 13

what is the ppc/ppf

Answer 13

a model that shows alternative ways that an economy can have it’s scarce resources.

graphically demonstrates scarcity, trade-offs, opportunity costs, and efficiency

Question 14

what are the 4 key assumptions for ppc

Answer 14

only 2 goods can be produced
full employment of resources
fixed resources
fixed technology

Question 15

what is opportunity cost

Answer 15

the cost of something, in terms of the lost benefit of the ‘next best’ alternative given up, when a choice has to be made

Question 16

3 shifters of the ppc

Answer 16

change in resource quantity or quality
change in technology
change in trade (more consumption)

Question 17

what is specialisation

Answer 17

specialisation is the concentration by a worker, group of workers, firm, region or whole economy on a narrow range of goods and services

Question 18

what is division of labour

Answer 18

when a business has employees working on one small part of a product. the workers specialise - each worker concentrates on doing one task. mm a manufacturing business this would be used with flow production

Question 19

advantages of division of labour

Answer 19

increased productivity
little training is needed and necessary skills are gained quickly
low skilled workers become efficient at their task
cheaper labour can be hired
the production process can be mechanised more easily

Question 20

disadvantages of division of labour

Answer 20

workers can feel alienated
motivation can be poor
quality may suffer is workers have less pride in their job
mass produced standardised goods lack variety
narrowly skilled workers may find it hard to gain work elsewhere (structural unemployment)

Question 21

what is a coincidence of wants

Answer 21

economic phenomenon where two parties each hold an item that the other wants, so they exchange these items directly without any monetary medium

Question 22

what is the barter system

Answer 22

exchanging goods and services on the basis of individual wants - what you have to offer

Question 23

what is an economic system

Answer 23

the method used by a society to produce and distribute goods and services

Question 24

what are the three economic questions

Answer 24

what goods and services should be produced
how should these goods and services be produced
who consumes these goods and services

Question 25

what are the different economic systems

Answer 25

command (centrally planned)
free market economy
mixed economy

Question 26

what is the invisible hand

Answer 26

the concept that society’s goals will be met as individuals seek their own self interest