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Needs - Necessities required for living

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153 Terms

1

Needs - Necessities required for living

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Wants - Not a necessity but something you would like to survive

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3

Production - The process of turning inputs into goods and services

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4

Consumers - Someone that buys goods and services

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5

Producers - A person or company that makes goods or services to sell

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6

Factors of production - The inputs used to produce goods and services

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7

Land - All natural resources used to produce goods and services

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8

Labour - The people used in production

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9

Capital - Man made goods used in the production process

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10

Enterprise - The person organising factors of production

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11

Opportunity cost - The best next alternative forgone

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12

Markets - The process by which the prices of goods and services are determined

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13

Factor markets - The buying and selling of land, labour and capital

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14

Product markets - A market where goods and services are bought and sold and prices are determined by the interaction of demand and supply

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15

Scarce resources - The limited availability of economic resources

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16

Primary sector - Industries involved in production or extraction of natural resources

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17

Secondary sector - Manufacturing industries that convert raw materials into finished goods

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18

Tertiary sector - Industries that provide services

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19

Specialisation - Where a country, business or worker focuses on the production of a limited range of products in order to gain efficiency

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20

Division of labour - Where workers specialise in one particular task of the production process

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21

Exchange - Where buyers and sellers come together in a market place to negotiate prices

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22

Demand - A consumers desire, willingness and ability to pay a price for a specific good or service

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23

Demand curve - Graph that shows the different quantity of product demanded at different price levels

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24

Shift in demand curve - Factors other than price causing demand to change

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25

Movement along the demand curve - Price changes that cause demand to change

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26

Supply - The amount of a product that producers and firms are willing to sell at a given price

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27

Supply curve - Graph that shows the different quantity of product supplied at different price levels

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28

Shift in supply curve - Factors other than price causing supply to change

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29

Movement along the supply curve - Price changes that cause supply to change

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30

Equilibrium price - The point at which quantity demanded and quantity supplied are equal

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31

Revenue - Income received from sale of goods or services

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32

Excess demand - When quantity demanded exceeds quantity supplied, resulting in shortages and higher prices

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33

Excess supply - when the quantity supplied exceeds the quantity demanded, resulting in excess products and lower prices

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34

Complements - A good or service that is used in conjunction with another good or service.

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35

Substitutes - Goods and services that can be used to replace each other

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36

Price elasticity of demand - The responsiveness in quantity demanded to a change in price

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37

Price elastic demand - When PED is greater than 1 and quantity demanded is very responsive to a change in price

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38

Price inelastic demand - When PED is less than 1 and quantity demanded is not very responsive to a change in price

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39

Price elasticity of supply - The responsiveness in quantity supply to a change in price

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40

Price elastic supply - When PES is greater than 1 and quantity supplied is very responsive to a change in price

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41

Price inelastic supply - When PES is less that 1 and quantity supplied is not very responsive to a change in price

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42

Business objectives - Specific and measurable targets set in order to meet the aims of the business

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43

Costs - The costs experienced when running a business

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44

Revenue (production) - Amount of income received by a business over a given time

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45

Profit - The difference between total revenue and total cost

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46

Total costs - The sum of fixed and variable costs

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47

Average costs - The cost to produce one product. Toal costs divided by quantity

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48

Fixed costs - Costs that do not vary with the quantity of output produced

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49

Variable costs - Costs that vary with the quantity of output produced

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50

Total revenue - Total money received by a business over a given amount of time

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51

Average revenue - Total revenue divided by the quantity sold, same as the selling price

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52

Productivity - The measure of output per unit of input

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53

Production - The transformation of inputs into goods or services

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54

Economies of scale - The cost per unit made declines with an increase in the number of units produced

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55

Diseconomies of scale - The cost per unit made increases with an increase in the number of units produced

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56

Managerial economies of scale - A firm can attract the best staff into the company

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57

Purchasing economies of scale - A reduction in unit costs as a result of buying in large quantities; these are sometimes called buying economies of scale.

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58

Financial economies of scale - The firm has a cheaper access to borrowing money

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59

Technical economies of scale - Can afford the most efficient machinery or capital equipment

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60

Risk-bearing economies of scale - Ability of firms to spread its risk over a large number of areas

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61

Market structures - How markets operate to allow buyers and sellers to come together

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62

Product differentiation - How firms make their goods or services different to those of its competitors

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63

Competitive markets - Market structures that have a great deal of competition between producers

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64

Monopoly - When there is only one provider of a particular good or service

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65

Oligopoly - When few dominant firms have a large market share of a particular market

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66

Gross pay - Total pay before deductions are taken off

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67

Net pay - Total pay after deductions have been made

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68

Market failure - When markets fail to act properly and resources are not allocated efficiently

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69

misallocation of resources - Where land, labour and capital are not used as efficiently as possible

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70

Market system - Where buyers and sellers come together to agree on quantity and prices of goods and services

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71

Government intervention - Where governments intervene to correct market failure

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72

Externalities - Costs (or benefits) arising from the decisions of an individual which impact on people other than the individual

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73

Positive externalities - Positive affect received by a third party resulting from a transaction in which they had no direct participation

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74

Negative externalities - Occurs when a product or decision costs the society more than its private cost.

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75

Social costs & benefits - The costs and benefits of a company or individuals impact on the environment and society for which they are not financially responsible

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76

Private costs & benefits - The costs and benefits received by the firm that produces the good or service

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77

Basic economic problem

the gap between scarce resources and the unlimited wants for them

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78

Market economy

the forces of supply and demand allocate resources via the price mechanism. All resources are privately owned and there is no government intervention

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79

Planned economy

the government allocates all resources via the price mechanism. All resources are owned by the government and they control prices

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80

Mixed economy

some resources are owned and allocated by private individuals and the government owns and allocates others

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81

Public sector

the government sector of the economy, where organisations are owned and run by the government

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82

Private sector

the sector of the economy where firms are owned and run by private individuals and groups - their main aim is profit maximisation

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83

Factors of production

resources used in the production process

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84

Capital

goods used to produce other goods and services

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85

Enterprise

having ideas and taking risk, with a reward of profit

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86

Labour

human input into the production process

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87

Land

physical land itself as well as all the natural resources and raw materials above/below the land which are available for production

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88

Opportunity cost

the next best alternative forgone when an economic choice is made

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89

Economic sustainability

considers how an economic choice ensures the best and most responsible use of scarce resources so that a firm or economy can keep growing over time

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90

Social sustainability

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

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91

Environmental sustainability

considers how an economic choice impacts renewable and non-renewable resources, pollution, climate change and the availability of resources, now and into the future

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92

Primary sector

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

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93

Secondary sector

the conversion of raw materials into goods; it includes all manufacturing and construction activities

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94

Tertiary sector

the provision of a service

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95

Market

where buyers and sellers meet to exchange goods and services

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96

Factor market

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

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97

Product market

where final goods and services are bought and sold

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98

Derived demand

the demand for a factor of production not for itself, but is dependent on the demand for the product it is used to produce

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99

Specialisation

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

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100

Division of labour

where each worker concentrates on only one small aspect of the production process

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