Economics Key Terms

studied byStudied by 11 people
3.0(2)
Get a hint
Hint

Consumer

1 / 91

flashcard set

Earn XP

Description and Tags

92 Terms

1

Consumer

A person or organization that directly uses a good or service

New cards
2

Good

A tangible product i.e. a product that can be seen or touched

New cards
3

Government

A political authority that decides how a country is run and manages its operation

New cards
4

Producer

A person, company, or country that makes, grows, or supplies goods and/or services

New cards
5

Service

An intangible product i.e. a product that cannot be seen or touched

New cards
6

Factors of production

The resources in an economy that can be used to make goods and services (CELL)

New cards
7

Labour

The factor of production concerned with the workforce of an economy

New cards
8

Land

The factor of production concerned with natural resources of an economy

New cards
9

Capital

The factor of production that relates to the human made aids to production e.g. machinery

New cards
10

Enterprise

The Factor of production that takes a risk (the entrepreneur) in organising the other 3 factor of productions

New cards
11

Interdependent

How factors are reliant on one another

New cards
12

Scarce Resources

When there is an insufficient amount of something to satisfy all wants

New cards
13

Unlimited wants

The infinite desire for something

New cards
14

Need

Something a consumer has to have to survive e.g. water/food

New cards
15

Want

Something a consumer would like to have but which is not essential for survival

New cards
16

Economic problem

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

New cards
17

Opportunity cost

The next best alternative given up when making a choice

New cards
18

Economic choice

An option for the use of selected scarce resources

New cards
19

Economic sustainability

The best use of resources in order to create responsible developmnet or growth that promotes an improvement in quality of life for all, now and into the future

New cards
20

Social Sustainability

The impact of development or growth that promotes an improvement in quality of life for all, now and into the future

New cards
21

Enviromental sustainability

The impact of development or growh where the effect on the enviroment is small and possible to manage, now and into the future

New cards
22

Market

A way of bringing buyerd and sellers to buy and sell goods and services

New cards
23

Market economy

An economy in which scarce resources are allocated by the market forces of supply and demand

New cards
24

Primary sector

The direct use of natural resources such as the extraction of basic materials and goods from land and sea

New cards
25

Secondary sector

All activities in an economy that are concerned with either manufacturing or construction

New cards
26

Tertiary sector

All activities in an economy that include the idea of a service

New cards
27

Factor market

Market in which the services of the factors of production are bought and sold

New cards
28

Product market

Market in which final goods and services are offered to consumers, buisnesses and the public sector

New cards
29

Exchange

The giving up of something that the individual or firm has, in return for something they wish to have but do not possess

New cards
30

Specialisation

The process by which individuals, firms, regions and whole economies concentrate on producing those products that they are best at producing

New cards
31

Division of labour

Where workers specialise in, or concentrate on one area of the production process

New cards
32

Demand

The willingness and ability to purchase a good or service at the given price in a given period of time

New cards
33

Individual demand

The deman for a good or service by an individual consumer

New cards
34

Law of demand

For most products the quantity demanded varies inversely with its prices

New cards
35

Market demand

The total deman for a good or service found by adding together all individual demands

New cards
36

Movement along the demand curve

When the price changes, leading to a movement up (expansion) or down (contraction) the existing demand curve

New cards
37

Shift of the demand curve

A complete shift of the existing demand curve either to the right (increased demand) or to the left (decreased demand)

New cards
38

Sunsidy

An amount of money the government gives directly to firms to encourage production and consumption

New cards
39

Tax

A compulsory payment to the government

New cards
40

Elastic demand

When the percentage change in quantity is greater than the percentage change in price (price sensitive customers)

New cards
41

Inelastic demand

When the percentage change in quantity demanded is less than the percentage change in price (customers are not price sensitive)

New cards
42

Price elasticity of demand (PED)

The responsiveness of quantity demanded to a change in price of a product

New cards
43

Law of supply

For most products the quantity supplied varies directly with its price

New cards
44

Supply

The ability and willingness of firms to provide good and services at each price in a given time period

New cards
45

Individual supply

The supply of a good or service by an individual producer

New cards
46

Market supply

The total supply of a good or service as a result of adding together all individual producers supplies

New cards
47

Movement along the supply curve

When the price changes, leading to a movement up (expansion) or down (contraction) on the existing supply curve

New cards
48

Shift of the supply curve

The complete shift of the existing supply curve either to the right (increased supply) or to the left (decreased supply)

New cards
49

Elastic supply

When the percentage change in quantity supplied is greater than the percentage change in price

New cards
50

Inelastic supply

When the percentage change in the quantity supplied is less than the percentage change in price.

New cards
51

Price elasticity of supply (PES)

The responsiveness of quantity supplied to a change in the price of the product

New cards
52

Price

The sum of money you have to pay for a good or service. It is determined by the interaction of supply and demand

New cards
53

Efficiency

The optimal production and distribution of scarce resources

New cards
54

Equilibrium price and quantity

Where the quantity supplied exactly matches the quantity demanded

New cards
55

Allocation of resources

How scarce resources are distributed among producers, and how scarce goods and services are allocated among consumers

New cards
56

Determination of price

The interaction of the free market forces of demand and supply to establish the general level of price for a good or service

New cards
57

Market forces

Factors that determine price levels and the availability of goods and services in an economy without government intervention

New cards
58

Competition

Where different firms are trying to sell a similar product to a consumer

New cards
59

Monopoly

A sole producer or seller of a good or service

New cards
60

Oligopoly

Where a small number of firms control the large majority of market share

New cards
61

Profit

The amount of money left after all costs have been paid total revenue - total costs

New cards
62

Productivity

A measure of efficiency in the use of factors of production in the production process. The output per unit of input

New cards
63

Average cist

The cost of producing a unit - unit cost of production total cost/nmber of units

New cards
64

Total cost

All the costs of the firm added together

New cards
65

Total revenure

The total income of a firm from the sale of its goods or service selling priced x number of items sold

New cards
66

Average revenue

The revenue per unit sold total revenue/number of units sold

New cards
67

Loss

When a firm's revenue is less than its costs

New cards
68

Economies of scale (Internal EOS)

The cost advantages a firm can achieve by increasing the scale of production, leading to a fall in average costs

New cards
69

Risk bearing economies

Large firms can spread the risk by offering a range of products or services

New cards
70

Finacial economies

Large firms can borrow money from the bank at a lower interest rate

New cards
71

Marketing economies

Large firms can pay for bigger marketing campaigns which reach a larger audience

New cards
72

Technical economies

Large firms can buy the best machines and expertise which increases output

New cards
73

Managerial economies

Large firms can afford to employ specialist managers

New cards
74

Purchasing economies

Large firms can bulk buy their raw materials

New cards
75

Economies of increased dimensions

Doubling the dimensions of a shipping containers to increase capacity and reduce costs of transportation

New cards
76

Research and development economies

Large firms can afford their own R&D departments, helping them stay ahead of competition

New cards
77

Labour market

Where workers sell their labout and employers buy their labour

New cards
78

Supply of labour

The total number of people who are willing and eligible to supply their labour, including the unemployed

New cards
79

Gross pay

The amount of money that an employee earns before any deductions are made

New cards
80

Deductions

Money taken out of a persons pay bracket e.g. income tax/national insurance/pension contribution

New cards
81

Income tax

A tax levied directly on personal income, i.e. a tax on a person's wages.

New cards
82

National insurance

A contribution paid by workers and their employers, towards the cost of state benefits

New cards
83

Net pay

The amount of money that an employee is left with after deductions are made from the gross income

New cards
84

Pension

A fixed amount paid at regular intervals to a person (usually retired), or their surviving dependants.

New cards
85

Money

Anything that is generally accepted as a means of payment for a good or service

New cards
86

Medium of exchange

Anything that sets the standards of goods and services acceptable to all parties involved in a transaction

New cards
87

Financial sector

Consists of financial organisations and their products, and involves the flow of capital

New cards
88

Investment

The purchase of capital goods that are used to produce future goods and services

New cards
89

Rate of interest (interest rate)

The cost of borrowing money and the reward for saving money

New cards
90

Building society

A mutual financial institution that is owned by its members. Its primary objectives are to receive deposits from its members and to lend money for members to purchase property

New cards
91

Mortgage

An agreement with a financial institution to borrow money to purchase a property

New cards
92

Insurance company

Financial institution that guarantees compensation for specified loss, damage, illness or death in return for an agreed premium

New cards

Explore top notes

note Note
studied byStudied by 18 people
... ago
4.0(1)
note Note
studied byStudied by 12 people
... ago
5.0(1)
note Note
studied byStudied by 34 people
... ago
5.0(1)
note Note
studied byStudied by 13 people
... ago
5.0(2)
note Note
studied byStudied by 1 person
... ago
5.0(1)
note Note
studied byStudied by 57 people
... ago
5.0(1)
note Note
studied byStudied by 22 people
... ago
5.0(1)
note Note
studied byStudied by 1975 people
... ago
4.7(11)

Explore top flashcards

flashcards Flashcard (93)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (115)
studied byStudied by 13 people
... ago
5.0(2)
flashcards Flashcard (22)
studied byStudied by 17 people
... ago
5.0(3)
flashcards Flashcard (75)
studied byStudied by 2 people
... ago
5.0(1)
flashcards Flashcard (29)
studied byStudied by 27 people
... ago
5.0(2)
flashcards Flashcard (40)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (20)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (134)
studied byStudied by 2615 people
... ago
4.0(26)
robot