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Economics Definitions > Micro Definitions > Flashcards

Micro Definitions Flashcards

(83 cards)

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1
Q

Consumer

A

A person or organisation that directly uses a G/S.

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2
Q

Producer

A

A person/company/country that makes, grows or supplies G/S

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3
Q

Government

A

Political authority that decides how a country is run + manages operation

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4
Q

Good

A

Tangible product (seen, touched)

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5
Q

Service

A

Intangible product (not seen, touched)

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6
Q

Production

A

Total output of G/S produced by a firm or industry in a time period

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7
Q

Factors of Production

A

The resources in an economy that can be used to make G/S

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8
Q

Labour

A

(FoP) The workforce of an economy involved in production

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9
Q

Land

A

(FoP) Natural resources of an economy

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10
Q

Capital

A

(FoP) Human-made aids to production

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11
Q

Enterprise

A

(FoP) Risk of organising the other Factors of Production, taken by the entrepeneur.

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12
Q

Scarce resources

A

There is an insufficient amount of something to satisfy all wants

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13
Q

Unlimited wants

A

Infinite desire for something

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14
Q

Need

A

Consumer has to have it to survive

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15
Q

Want

A

Consumer would like to have, but inessential for survival

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16
Q

Economic problem

A

How to best use limited resources to satisfy unlimited wants of the people.

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17
Q

Opportunity Cost

A

Next best alternative given up when making a choice

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18
Q

Economic choice

A

An option for the use of selected scarce resources

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19
Q

Economic sustainability

A

Best use of resources to create responsible growth, now and in the future

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20
Q

Social sustainability

A

Impact of growth that promotes an improvement in quality of life for all, now and in the future

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21
Q

Environmental sustainability

A

Impact of growth where the effect on the environment is small and manageable, now and in the future

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22
Q

Market

A

Way of bringing together buyers and sellers to buy and sell G/S.

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23
Q

Free Market economy

A

Where scarce resources are allocates by supply and demand

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24
Q

Primary sector

A

Direct use of natural resources (extraction of raw materials from land and sea)

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25
Secondary sector
Manufacturing or construction
26
Tertiary sector
Involve idea of a service
27
Factor Market
Services of FoP bought and sold (Labour market)
28
Product Market
Where final G/S are offered to consumers, businesses and the public sector.
29
Exchange
Giving up something the individual or firm has, for something they wish to have but don't possess
30
Specialisation
Process by which individuals, firms, regions and economies concentrate on producing products that they are best at producing.
31
Division of Labour
Where workers specialise in one area of the production process.
32
Demand
Willingness & ability to purchase a G/S at the given price in a given time period
33
Law of Demand
Quantity demanded varies inversely with price
34
Individual Demand
Demand for a G/S by an individual consumer
35
Market Demand
Total demand for a G/S (sum of individual demand)
36
Movement along Demand Curve
When price changes, movement up/down demand curve
37
Shift of the Demand Curve
Complete movement of the demand curve (right, left)
38
Subsidy
Money the government gives to firms to encourage production and consumption
39
Tax
Compulsory payment to the gov.
40
Elastic demand
% Change in quantity demanded is GREATER than % change in price
41
Inelastic demand
% Change in quantity demanded is LESS than % change in price
42
Price elasticity of demand
Responsiveness of quantity demanded to a change in the price of product.
43
Law of Supply
Quantity supplied varies directly with price
44
Supply
Ability and willingness of firms to provide G/S at each price in a given time period
45
Individual supply
The supply of a G/S by an individual producer
46
Market supply
Total supply of a G/S (sum of individual supply)
47
Movement along the supply curve
Price changes, movement up/down the supply curve.
48
Shift of the supply curve
Complete movement of supply curve (right, left)
49
Elastic supply
% change in quantity supplied GREATER than % change in price
50
Inelastic supply
% change in quantity supplied LESS than % change in price
51
Price elasticity of supply
Responsiveness of quantity supplied to a change in price
52
Price
Sum of money paid for a G/S. Determined by interaction of supply and demand
53
Efficiency
Optimal production and distribution of scarce resources
54
Equilibrium price and quantity
Where quantity supplied matches quantity demanded
55
Allocation of resources
How scarce resources are distributed among producers How scarce G/S allocated among consumers
56
Price determination
Interaction of demand and supply to find general level of price for a G/S.
57
Market forces
Factors that determine PRICE LEVELS and the AVAILABILITY of G/S in an economy without gov. intervention.
58
Competition
Different firms are trying to sell a similar product to a consumer
59
Monopoly
One main producer of a G/S (25%+ of market share)
60
Oligopoly
Small number of firms control majority of market share
61
Profit
Amount of money a producer has left after all costs paid (Total Revenue > Total Cost)
62
Productivity
Measure of degree of efficiency in use of Factors of Production in production process. OUTPUT PER UNIT INPUT
63
Average Cost (AC)
Cost of producing one unit
64
Total Cost (TC)
All the costs of the firm added together
65
Total Revenue (TR)
Total income of a firm from sales of G/S
66
Average Revenue (AR)
Revenue per unit sold
67
Loss
Total Revenue < Total Costs
68
Economies of Scale
COST ADVANTAGES that the firm gains from increasing scale of production = FALL IN AVERAGE COSTS
69
Labour Market
Where workers sell labour and employers buy labour. Households = SUPPLY Firms = DEMAND
70
Supply of Labour
Total number of people who are WILLING AND ELIGIBLE to supply their labour (including unemployed)
71
Gross pay
Amount of money an employee earns BEFORE DEDUCTIONS
72
Income tax
Tax directly on personal income
73
National Insurance
Contribution by workers and employers, towards the cost of BENEFITS
74
Net pay
Amount of money employee left with after DEDUCTIONS
75
Pension
Fixed amount paid at regular intervals to retirees, or their dependants.
76
Money
Means of payment for G/S
77
Medium of exchange
Anything that sets standard of value of G/S acceptable to ALL PARTIES IN TRANSACTION
78
Financial sector
Financial organisations and their products. Involves flow of capital
79
Investment
Purchase of capital goods (used to produce future G/S). Asset purchased to provide income in future OR sold for profit
80
Interest rate
Cost of borrowing money paid to bank Reward of saving paid to saver
81
Building society
Mutual financial institution owned by its MEMBERS. They receive deposits from members + lend money for property purchase.
82
Mortgage
Agreement with financial institution to borrow money to purchase a property.
83
Insurance company
Financial institution that guarantees compensation for loss, damage, illness, death in return for AGREED PREMIUM

Economics Definitions (2 decks)

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