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Description
Flashcards by armanakther, updated more than 1 year ago
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Created by armanakther
over 8 years ago
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| Question | Answer |
| Positive statement | A statement of fact that can be scientifically tested to see if it is correct or incorrect. |
| Normative Statement | A statement that includes a value judgement and cannot be refuted just by looking at the evidence |
| Need | Something that is needed for human survival, (such as food, warmth, shelter). |
| Want | Something that is desirable but not necessary for human survival. |
| Economic welfare | The economic well-being of an individual, a group within society or an economy. |
| Output | Quantity of goods or services produced in a given time period, by a firm, industry, or country, whether consumed or used for further production. |
| Production | A process or set of processes, that converts input in output of goods. |
| Consumer good | A good which is consumed by individuals or households to satisfy their needs or wants. |
| Factors of Production | Inputs into the production process, such as Land, Labour, Capital, Enterprise. |
| Land | The raw materials or natural resources obtained from the land that can be used for the production of a good. |
| Labour | The work done by the laborers and workers at all levels of an organization, except for the entrepreneur. |
| Capital good (producer good) | A good ,such as a tool, that is used in the production of other goods or services. |
| Enterprise | The entrepreneur is the individual, like a manager, who takes an idea and attempts to make an economic profit from it by combining all other factors of production. The entrepreneur also takes on all of the risks and rewards of the business. |
| Finite resource (non-renewable resource) | A resources. such as oil, which is scarce and runs out as it is used. |
| Renewable resource | A resource, such as timber, that with careful management can be rewed as it is used. |
| Fundamental economic problem | How best to make decisions about the allocation of scarce resources among competing uses to improve and maximise human happiness and welfare. Wants are infinite but resources are finite. |
| Scarcity (paucity) | Results from the fact that people have unlimited wants but finite resources for their wants. |
| Opportunity cost | The cost of giving up the next best alternative. |
| Production possibility frontier (PPF) | The PPF curve shows all maximum output possibilities for two or more goods for a set of inputs (resources, labor, etc). The PPF assumes inputs are used efficiently. |
| Economic growth | The increase in the potential level of real output the economy can produce over a period of time. |
| Full employment | When all who are able and willing to work are employed. |
| Unemployment | When NOT all of those who are able and willing to work are employed. |
| Choice | Choosing between alternatives when making a decision on how to use and distribute scarce resources. |
| Resource allocation | The process through which the available factors of production are assigned to produce different goods and services, e.g. how many of the society's economic resources are devoted to supplying different products such as food, cars, healthcare and defence. |
| Productive eficiency | Occurs, (for the economy as a whole), when it is impossible to produce more of one good without producing less of another. (For a firm it occurs when the average total cost of production is minimised). Illustrated on a PPF curve, where all points on the curve are points of productive efficiency. |
| Allocative efficiency | Occurs when the available economic resources are used to produce the combination of goods and services that best matches people's tastes and preferences. |
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