Ocr economics gcse keywords

Land

Natural resources of an economy eg agriculture, fishing, forestry, oils

Labour

The workforce of an economy- both mental and physical efforts involved in production

Capital

Human made aids to production

Enterprise

An entrepreneur taking a risk to organise the other three factors of production- land, labour, capital

Human capital

The value of a worker based on their skills, experience or qualifications

Capital good

Eg a car can be used for personal use at first but in the future can be used as as a taxi therefore a source of income

Consumers

A person or organisation that directly uses a good or service

Producers

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

Government

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

Needs

Something essential for survival such as food, shelter, water or medical care.

Wants

Desires we do not need to survive. People have unlimited wants

Renewable resources

Natural resources that can be replaced/used repeatedly

Non-renewable resources

A resource of economic value that cannot be replaced quickly enough to meet unlimited needs/wants eg fossil fuels, oil, natural gases

Scarce resources

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

The Economic Problem

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

Opportunity cost

The next best alternative given up when making a choice

Market

a place where buyers and sellers come together to buy and sell goods & servicrs

Market structure

The nature and degree of competition among firms operating in the same industry.

Price mechanism

Price signals that determines allocation of resources through interaction of supply and demand

Primary sector

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

Secondary sector

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

Tertiary sector

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

Quaternary sector

Used to describe a knowledge-based part of the economy eg information technology, media, research & development

Products

Made up of goods & services

Goods

Tangible products

Services

Intangible products

Factor markets

Market where the services of the factors of production are bought and sold

Product markets

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

Specialisation

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

Division of labour

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

Stakeholder

Anybody with an interest in a firm eg customers, suppliers, shareholders, community, employees, managers, government etc

Normal good

If price increases demand will decrease, if price decreases demand will increase

Necessity goods

Goods needed in order to survive eg water, food or shelter

Luxury goods

Higher end of a good eg designer clothes, expensive cars

Demand

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

Disposable income

Money that you need to spend in a household

Substitute goods

Goods that act as an alternative eg butter & margarine

Complement goods

Goods brought alongside another good eg fish & chips, PlayStation & video games

Unit costs (average costs)

Cost of making ONE product

Price elasticity of demand(PED)

Measure of the responsiveness of demand to a change in price

Price elastic

Change in demand if price changes by increasing or decreasing ALOT
15%/5% \= ELASTIC

Price inelastic

Change in demand if price changes by increasing or decreasing by a SMALL AMOUNT.
3%/5% \= INELASTIC

Supply

The amount of a product that producers are willing & able to sell, at a specific time, at a specific price

Subsidies

Sum of money that governments give to firms.

Law of supply

As price increases quantity increases, as price decreases quantity decreases

Price elasticity of supply(PES)

Measures the responsiveness of the quantity supplied of a good or service to a change in its price.

Price

Reflects the value or worth that people are willing to put on a good or service

Equilibrium price

Price at which demand is equal to supply

Equilibrium quantity

Quantity brought & sold at which quantity demanded is equal to quantity supplied

Revenue

Money made from sales.
(quantity sold x selling price)

Determination of price

The interaction of the market forces of demand & supply to establish an equilibrium price.

Competition

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

Monopoly

A sole product or seller of a good or service

Oligopoly

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

Excess demand

When the amount demanded is greater than the amount producers are willing to supply

Excess supply

When the amount supplied is greater than the amount consumers are willing to buy

Market economy

Where prices are based on the forced of demand & supply & there is unrestricted competition

Price leaders

Can charge high prices but are often restricted from doing so by government regulation

Barriers to entry

Exist on monopoly markets that stop firms from entering the market

Duopoly

Where two firms dominate the market

Monopolistic competition

Where there's lots of competition competing on price

Lower unit costs

Means each good is produced for a smaller amount of money

Patent

Intellectual property. Where you protect your idea of a product

Non-competitive market

Where firms have some power to influence price

Profits

The money left over for a firm from their revenue after paying all expenses.

Production

The process of creating goods and services

Productivity

The quantity of goods and services produced from each unit of labor input

Economies of scale

Factors that cause a producer's average cost per unit to fall as output rises

Average cost

Cost of producing one unit(the total cost divided by the quantity produced)

Total Cost (TC)

Adds all the costs of the firm added together

Total Revenue (TR)

The total money received from the sale of a product

Average Revenue (AR)

The revenue per unit sold

Loss

When a firm's revenue is less than its costs e.g TR

Labour market

Where individuals supply themselves for work & employers e.g individuals, firms & government pay for their services

Salary

Yearly pay

Wage

Monthly/weekly pay

Income tax

Tax paid to the state, federal, and local governments based on income earned over the past year.

Net pay

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

Pension

A fixed amount of money paid to a retired person by a government or former employer

National Insurance

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

Store of value

Something that keeps its value if it is stored rather than used

Unit of account

A means for comparing the values of goods and services

Gross Pay

Amount of money that an employee earns before any deductions are made

Money

Anything that is accepted as payment for goods and services

Medium of exchange

Anything that is used to determine value during the exchange of goods and services

Banks

Financial institutions licensed to receive deposits and make loans

Building Societies

Financial institutions that provide a wide range of banking and financial investments

Insurance companies

Businesses that protect their clients against financial losses from certain specified risks (death, accident, and theft, for example)

Saving

Part of an individual's income which is not spent on consumption

Borrowing

Obtaining money, goods, or services in exchange for promise of future payment

Investment

The value of capital goods produced in an economy over a period of time

Asset

Anything of value that is owned as can provide income in the future &/or for profit

Simple interest

Interest earned only on the original principal amount invested

Gross Domestic Product (GDP)

The value of output produced in a country over one year

GDP Per Capita

GDP divided by the total population

Compound interest

Interest earned on both the principal amount and any interest already earned

Full employment

When all factors of production are fully utilised

Unemployment

When people are willing & able to work cannot find a job

Employment

When people who are willing & able to work can find a job

Claimaint Count

The number of people claiming Job Seeker's Allowance(JSA)