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Flashcards in S3 exam Deck (87):
1

Supply

The amount of a good or a service firms or producers are willing to make and cell at different prices

2

Quantity supplied

The amount of a good or service producers are willing and able make and sell in a market

3

Market supply

The amount supplied by all the individual producers competing to supply the product

4

Rise in supply

Other products becoming less profitable
An increase in resources
Technical progress
Increase in business optimism
Government paying subsidies to producers
Cutting taxes on profit
Fall in costs of employment factors
Season

5

Fall in supply

Other products becoming more profitable
Rise in the costs of employing factors
A fall in availability of resources
A fall in business optimism
Government withdrawing subsides
Increasing taxes on profit

6

Injections

This is the category given to any spending in an economy that is not consumer spending

7

Invesments

This is the spending by firms, normally on capital good e.g machinery

8

Exports

The money spent by oversea firms and individuals on British goods

9

Government spending

The spending in the economy of the public sector, determined by government decisions

10

Leakages

This category is given to withdraws of money from the circular flow diagram

11

Savings

Money that consumers save from there income

12

Imports

The amount spent bu UK firms and individuals on foreign goods and services

13

Taxes

The amount of revenue collected from central and local governement

14

Demand

The willingness of a consumer to buy goods and services

15

Effective demand

Consumers must have enough money to buy goods and services they need and want

16

Quantity demanded

Amount of good and services consumers are willing and able to buy

17

Individual demand

The demand of one consumer

18

Market demand

The total demand for that product from all its consumers

19

Extension of demand

Demand rises with a fall in price

20

Contraction of demand

Demand contracts when price rises

21

Market demand curve

The relationship between quantity demanded and price

22

Ceteris paribus

All other factors remain unchanged

23

Normal good

The demand for a product tends to rise when incomes rise

24

Inferior food

The demand tends to fall while incomes rise

25

Disposiable income

The amount of income left to save or spend after deductions

26

Complementary good

When a good needs an accessories to go with it i.e TV and remote

27

Joint demand

Complementary goods that are worth the same

28

Substitutes

When a purchase can be replaced by a want of another good or service

29

Land

Natural resources

30

Labour

Human effort

31

Capital

Man made resources

32

Enterprise

The eneterpreuneuer who brings all the factors together

33

Rent

Reward for land

34

Wages

Reward for labour

35

Interest

Reward for capital

36

Profit

Reward for enterprise

37

Factors of production

Land, labour, capital, enterprise

38

What are resources not scareced called

Free goods

39

Consumption

Using up goods and services to satisfy our needs and wants

40

Consumer spending is called

Consumer expenditure

41

Capital goods

Man-made resources which help to produce goods and sevices e.g machines

42

Public goods

Goods for the benefit of public e.g street lamps

43

Merit goods

Goods and sevices which the government thinks will benifit the public e.g education, health care

44

Scarcity

Limited resources but unlimited resources

45

Opportunity cost

The sacrifice of the next best alternative choice e.g choosing a mars bar over a dairy milk; the oppetunity cost would be the dairy milk

46

What maximises economic welfare

Satisfying consumers needs and wants

47

Maket

Arrangements that brings together producers and consumers of a good or service so they can engage in exchange at certain price

48

Barter

Producers are willin to exchange other goods and sevices they want fo there owm

49

Demand

The want and wilingness of a consumer to buy goods and sevices

50

Criteris paribus

Meaning that all other factors remain unchanged

51

Rise in demand

Change in weather
Increase in population
Reduction in tax
Change in fashion
Increases in consumers income

52

Fall in demand

Change in weather
Increase in tax rates
Fall in population
Change in fashion
Increase tax on income

53

Disposable income

The amount of income people have to spend or save after taxes on their incomes have been deducted

54

Marginal utility

The satisfaction gained from consuming an extra unit of a good

55

Total utility

The total amount of satisfaction gained from consuming a product in a period of time

56

Diminishing marginal utility

The more we consume of a good, the less wea re willing to pay to get one more unit of it. This is because our satisfaction falls after consuming more than one unit

57

Substitution effect

As price rises or income decreases will replace more expensive items with less costly alternatives

58

Income effect

The change in consumers real income resulting a change in product prices meanin demand for a product also changes

59

Demand curve slope downwards

Law of diminishing marginal utility
Income effect
Subsitute effect

60

Value added

The difference between the market price paid fo a product by a consumer and the cost of the natural and man-made materials, complainants and resources to make it

61

Productivity

The amount of output that can be produced per unit of output in a certain time

62

Production efficiency

The maximum output for tha maximum cost and therefore maximising profit

63

Short run

The firm will have fixed capsity i.e at least one factor of production is fixed ad cant be expanded

64

Long run

The firm wil be able to vary all the factors of production

65

Total revenue

Total receipts from sales of a given quantity of goods or services
Price x quantity

66

Average revenue

The revenue generated per unit of output sold
Total revenue divided by quantity

67

Marginal utility

the additional revenue that will be generated by increasing product sales by one unit
Price

68

Cost

The payment by a firm in producing its outputs

69

Fixed costs

Any costs that in the short run don't vary

70

Variable costs

Any costs that tend to vary directly with levels of output

71

Economic growth

This occurs when there is an increase in total output of goods and services over one year period of time using the same or fewer resources

72

How to measure economic growth

National income

73

National income

The value of all goods and services produced in the economy in a year

74

Gross demestic product (GDP)

This measures the goods and sevices that are produced in the UK no matter who owns the resources

75

Inflation

The rate at which the general level of prices for goods and sevices is rising and consequently the purchasing power of currency is falling

76

How to measure REAL NI

REAL NI = NI - inflation

77

Factors effecting living statdards

Employment
Inflation
Taxation
Income
Interest rates
Health care
Education
Benifit level

78

Why do supply curves slope upwards

Higher profit per unit
New firms will enter the market

79

Ways of saving money

ISA,
Regular savings account

80

Ways of borrowing money

Credit cards
Hire purchase

81

Advantage of credit cards

More secure when there is problem with retailer

82

Disadvantage of credit cards

High interest rates

83

Advantage of bank loans

Low interest rates compared to credit cards

84

Disadvantage of bank loans

Pay back more than you borrowed

85

Factors that effect consumer confidence

Changes in governement borrowing
Exchange rate fluctuations

86

Consumer confidence

degree of optimism that consumers feel about the overall state of the economy and their personal financial situation

87

How can the governement improve economic growth

Providing subsidies to businesses, schools and hospitals to improve quality
More productivity of people and more jobs result in an increase of productivity which means more money is entering the circular flow