Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Ecos > Paper 1 > Flashcards

Paper 1 Flashcards

(49 cards)

Start Studying
1
Q

Economic problem

A

When people have unlimited wants and limited resources.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Economics

A

It is the study of how people make choices on how to satisfy their unlimited wants with scarce resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Opportunity Cost

A

It is the cost of making a descison , the value of which had to be given up.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Factors Of Production

A

Labor, Land, Entrepreneurship, Capital

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the remuneration of the F of P?

A

Labor - Salary, wages
Land - Rent
Capital - Interest
Entrepreneurship - Profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Define traditional economy

A

The hierarchy within the society determines the allocation of resources.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Define Planned Economy

A

Government decides on the production and distribution. They own the f of P

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is a business cycle?

A

A business cycle is a cyclical pattern caused by the increasing and decreasing trends of economic activity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Explain expansion in a Business cycle

A

An upswing is a period of expansion:
GDP is growing
Unemployment rates decline
Inflammation may rise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Explain contraction in a Business cycle

A

A downswing is a period of contraction:
Decline in GDP growth
Unemployment rises
Inflation pressures subside

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Economic problem questions

A

What?
How?
For whom?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Define MARKET ECONOMY

A

Private ownership and individual preferences prevail. Marketplace determines production and distribution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

BRANCHES OF ECONOMICS

A

DEVELOPMENT – policies and strategies to make countries grow
REGIONAL – specific geographical locations
OTHER – study of economics of war, poverty, crime, etc
ENVIRONMENTAL – issues and implications
LABOUR –demand and supply of labour/productivity
PUBLIC – decisions and policies made by gov
MONETARY – study of money and banking
INTERNATIONAL – study of international trade and finance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

NORMATIVE STATEMENTS vs POSITIVE STATEMENTS

A

Opinion and facts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

CETERIS PARIBUS

A

with all other things remaining the same

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Define SCARCITY

A

It is resources which are difficult to find or are in short supply.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Define ALTERNATIVES

A

Trade-offs is all the alternatives that we give up whenever we choose one course of action over others.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Define CHOICE

A

Choice is a result of scarcity
Choice means that one alternative is selected over another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Opportunity cost

A

the cost of the thing chosen in terms of the cost of the alternative that
has been given up

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Absolute scarcity

Study These Flashcards
A

When someone has the means & resources to buy a product but there is no supply of that product

21
Q

Relative scarcity

Study These Flashcards
A

When there is more than enough of a product but there is no resources to purchase or make use of them

22
Q

Free goods

Study These Flashcards
A

plentiful and have no price

23
Q

Economic goods

Study These Flashcards
A

produced from scarce resources – have cost and a final price

24
Q

Utility

Study These Flashcards
A

worth, value, satisfaction

25
Primary goods
Farming Fishing Forestry Mining
26
Secondary
Manufacturing Processing
27
Tertiary
Transport Sales
28
Capital intensive production
this is when man-made goods are predominantly used in the production process and relatively few workers are employed
29
Labour intensive products
is when manual labour is predominantly use in the production process and less machines are used
30
Specializations
when people concentrate on different activities to which they are best suited for
31
Formal sector
is where businesses which are legally registered and their production is recorded in the GDP figures
32
Informal sector
the informal sector is businesses which are not legally registered and their production is not recorded in the GDP figures of the country
33
THE CIRCULAR FLOW
A model is a simplification of reality
34
Injections
Money entering the circular flow Exports (X) Government spending (G) Investment by financial institutions (I)
35
Leakages
Money leaving the circular flow Savings (S) Taxes (T) Imports (M)
36
Gross Domestic Product (GDP)
Value of all the final goods and services produce Within the country Within a given period, usually a year
37
Gross National Income (GNI)
Total compensation paid to owners of factors of production (salaries, wages, rent, profit, interest) Within a given period, usually a year
38
how to calculate GDP
Production method Calculating the sum of the value added at each stage of the production process. Yields GDP at basic prices. Income method Calculating the income earned by the factors of production within the borders of the country. Yields GDP at factor cost. Expenditure method Calculating total expenditure on all final goods and services produced within the borders of the country. Yields GDP at market prices.
39
Reasons for business cycles
Exogenous Endogenous Other
40
Exogenous Reasons
Outside the economic system Eg. Weather, politics, technology, structural changes, money supply
41
Endogenous Reasons
Within the economic system Eg. Decrease in interest rates promoting borrowing and spending
42
Other Reasons
Psychological factors (Eg. fears of recession) Political changes (Eg. 1994) Structural changes (Eg. producing more tertiary products)
43
Indicators
Leading - Change before economic activity. Predict what is to happen Eg. Share prices, job adverts, new car sales Coincidental-Change in the same direction and same time as the economy. Indicate the state of the economy Eg. Decrease in interest rates promoting borrowing and spending Lagging-Change after economic activity. Confirm how the economy has changed Eg. Hours of work in construction, employment in non-agricultural sector
44
Changes in aggregate(total) supply/demand
During recovery period: people demand more more goods and services produced products and services increase at a faster rate During a recession: people demand less businesses realise they are oversupplying, cut back on production if they cut back too quickly, leads to recession
45
Changes in economic growth
Downswings 🡺 less economic growth Upswings 🡺 more businesses opening up, increased production
46
Changes in employment
Downswings: businesses produce less make less profits cannot pay staff and retrench workers leading to higher unemployment Upswings: businesses produce more to keep up with demand employ more workers to help higher profits mean they can pay more workers leading to lower unemployment
47
48
Command economy
The authorities decide on the production and distribution of the products. Resources are used and distributed according to a government plan
49
Exogenous reasons
Originate outside the market economy or outside the economic activities

Ecos (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions