Term
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Definition
| Goods used in the production of other goods |
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Term
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Definition
| Workers, can be skilled or unskilled, intellectual or physical. |
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Term
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Definition
| All natural resources used in production |
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Term
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Definition
| Owner, entrepreneur. Takes risks. |
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Term
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Definition
| Factual, can be proven true or false. |
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Term
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Definition
| Based on judgement or opinion. Not factual. |
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Term
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Definition
| Total value of all goods and services within national borders. |
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Term
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Definition
| Gross Domestic Product + revenue from companies owned abroad. |
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Term
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Definition
| Market fails to allocate scarce resources efficiently. |
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Term
| Income Elasticity of Demand |
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Definition
YED = (%∆QD) / (%∆Y)
Normal + Inferior - |
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Term
| Cross-Elasticity of Demand |
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Definition
(%∆QD1) / (%∆P2)
Substitute good + Compliment good - |
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Term
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Definition
| A measure of the responsiveness of one variable to a change in another variable. The more general the product the more inelastic it is. |
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Term
| Price Elasticity of Demand |
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Definition
(%∆QD) / (%∆P)
PED>1 = elastic, PED<1 = inelastic and PED=1 = Unitary PED |
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Term
| Production Possibility Frontier shows.. |
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Definition
| Scarcity, choice, opportunity cost, actual growth, potential growth, efficiency and development. |
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Term
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Definition
Luxury goods, Price up demand up!
Exception to the law of demand. |
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Term
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Definition
Type of inferior good, few substitutes. Price up QD up.
Exception to the law of demand. |
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Term
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Definition
| A want backed by the willingness to pay. |
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Term
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Definition
| The quantity of a good producers are willing and able to supply to a market at a given price. |
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Term
| Disadvantages of a free market |
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Definition
| Merit good are only available for rich people (underprovided). Consequentially, demerit goods are overprovided. Monopolies might form. Without planning, resources will be used up. Orphans/sick people/ longterm unemployed people will suffer. |
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Term
| Disadvantages of a planned economy. |
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Definition
| Too complex for 100% efficiency, there will be misallocation of resources, shortages and surpluses. Workers will not be motivated when there is no improvement possible, quality/output will decrease. Government dominance = less freedom, and forced policies on a people that disagrees. |
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Term
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Definition
| Development that meets the needs of the present without compromising the needs of the future. |
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Term
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Definition
| Income rises, demand rises. |
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Term
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Definition
| Income rises, demand falls. |
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Term
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Definition
| Price for good 1 decreases, demand for that good increases while demand for good 2 decreases. |
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Term
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Definition
| Goods bought together, printer and ink. Demand for good 1 increases, demand for good 2 increases. |
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Term
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Definition
| A prive level imposed by the government set under the equilibrium price level that prevents producers from raising the price. |
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Term
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Definition
| A price level imposed by the government set above the equilibrium price that prevents producers from lowering the price. |
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Term
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Definition
| When production or consumption has an impact on a third party. |
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Term
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Definition
| The total demand for an economy's goods and services. AD = C+I+G+(X-M) |
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Term
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Definition
| The total of goods and services an economy can produce in a given time period. |
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Term
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Definition
| Demand-side policy. Government policy relating to spending, direct and indirect taxation. |
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Term
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Definition
| Demand-side policy. Government policy involving interest rates and control of money supply. |
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Term
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Definition
| Focus on microeconomics: Privatisation. Education and training. Low taxation. Deregulation. Reducing trade union power. Minimum wage. |
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Term
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Definition
| A sustained increase in the general price level over a given time period. |
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Term
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Definition
| Registered as willing and able to work (of working age) in the labour force, but who do not work. |
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Term
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Definition
| Cyclical (involuntary). Seasonal. Frictional. Structural. CLASSICAL |
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Term
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Definition
| Cost-Push inflation. Demand-Pull inflation. Excessive Monetary inflation. |
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Term
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Definition
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Term
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Definition
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Term
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Definition
| Increase in a measure of economic income (GDP or other) |
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Term
| Price Elasticity of Quantity Supply |
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Definition
| PES 0 %change in Qs over %change in P |
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