(diagrams included in the flashcards)

The basic economic problem - How to best use the limited resources to satisfy the unlimited wants of consumers.

Demand - The quantity of a good or service that consumers are willing and able to buy at a given price in a given time period.

Supply - The quantity of a good or service that producers are willing and able to supply at a given price in a given time period.

Opportunity cost - The next best alternative given up when making a choice.

Wants - The unlimited desire for anything the consumer wants to purchase, even if they aren’t currently able, e.g a pet clive

Needs - Something the consumer must have in order to survive, e.g food and water, economics lessons

Aggregate Demand - The total demand for goods and services produced within the economy over a period of time.

Formula for Aggregate Demand - C + I + G + (X -M)

C + I + G + (X -M) - Consumer spending + Government spending + Investment + (Exports - Imports)

The factors of production - The four things a firm needs to be able to produce their products or provide their service.

CELL - Capital, Enterprise, Land, Labour