Micro Flashcards
(23 cards)
Land
Physical space for factories and roads
Rent
Labour
Workforce of economy
Wages
Capital
Sum of buildings, machinery, vehicles and computers used by workers to help them produce output
Interest
Entrepeneurship
Managerial ability
Profit
Non renewable resources
Fossil fuels
Wood
Fish stocks
Renewable resources
Wind power
Tidal power
Intergenerational inequality
People currently enjoy a standard of living which could threaten the wellbeing of future generations
Durable goods
Consumed over a period of time
Basic Economic Problem
Resources are finite, but wants and needs are unlimited
Must choose WHAT to produce, HOW to produce it, WHO to produce it for
Opportunity Cost
The benefits foregone of the next best alternative
Normative statements
Valued judgements/ opinion
Positive statements
Can be found to be true or false if empirically tested
Allocative efficiency
Output combination where social welfare is maximised
Free goods
Do not incur an opportunity cost
Ceteris paribus
All other things being equal
Demand
The amount that consumers are willing and able to buy of a good or service at any given price
Diminishing Marginal Utility
The utility from each additional unit consumed will decrease
Wealth
Stock of assets accumulated over time
Total revenue =
Price x quantity sold of a good or service
Subsidies
Sums of money given by the government to producers to encourage them to supply more to the market
Law of diminishing returns
If more of a variable factor of production , such as labour, is added to a fixed amount of capital, then the output will fall for each additional worker in the short-run
Profit =
Revenue - costs
Factors of Production
Land
Labour
Capital
Entrepeneurship
