test (economics) Flashcards
(26 cards)
Economics definition?
The branch of knowledge concerned with the production, consumption and transfer of wealth
What do individuals, firms and the government do?
Make choices about the production and consumption of resources
What’s a resource?
Anything human uses to forfull their needs or wants
Three categories of resources?
Natural ( land ), Human ( Labour ) and Capital
What are the four economic questions?
- What?
- How?
- How much?
- For whom?
Who are the four questions answered by?
Consumers, producers and price
What are goods?
Things you can take home once purchased
What are services?
Things you can’t take home even when bought
All the markets?
Mixed market, planned market and free market
What does GDP stand for?
Gross Domestic Product
Individuals are the consumers or producers?
Consumers ( Demand )
Firms are the consumers or producers?
Producers ( Supply )
What’s a market?
When money is exchanged for goods and services
What’s the definition of Demand?
The quantity of a good or service that consumers are willing and able to purchase at a certain price
What is the definition of Supply?
The quantity of a good or service that producers are willing and able to sell at a certain price
What is Law of demand?
As the price of a good or service increases consumers will buy less of it
What is law of supply?
As the price of a good or service rises the producers will supply more of it
Non price factors that effect demand?
- income of consumers
- price of substitutes
- price of complements
- consumers tastes or preferences
Non price factors that effect supply?
- costs of production
- availability of resources
- technology
- price of substitutes
- price of complements
What’s a surplus?
When the market/store brings down the price of a product so more people buy it. Put a sale on
What’s a shortage?
When a product becomes scarce so the price becomes way more expensive.
The economic problem?
The economic problem is to match limited resources to unlimited wants and needs
What is the interdependence in markets?
The relationship in which consumers & producers rely on each other.
Definition of GDP
What everyone in the country is producing as a total
