Chapters 1.1-3.8

tangible product

intangible product

person, firm or organisation who directly uses a good or service

individual or firm or country that makes, supplies grows a good or service

political authority that decides how a country should be run and manages its operations

when one group responds to or is affected by the actions of another

resources that can be used in an economy to produce goods and services

natural resources available for production

human input into the production process

organises the factors of production and take risks

man-made aids to production

when there are insufficient resources to satisfy all wants

infinite desire for something

something a consumer has to have to survive

something a consumer would like to have which is not required for survival

how best to use limited resources to satisfy unlimited wants

option for the use of scarce selected resources

value of the next best alternative foregone

how best to utilise scarce resources in order to create responsible development, now and into the future

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

impact of development or growth where the effect on the environment is small and possible to manage, now and into the future

way of bringing together buyers and sellers in order to buy and sell goods and services - involves specialisation

economy in which scarce resources are allocated by market forces of supply and demand

extraction of raw materials

manufacture and construction

goods and services

where the services of factors of production are bought and sold

where final goods and services are sold

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

the act of giving up something the individual or firm has for something they want but do not possess

where workers specialise or concentrate on one area of the production process

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

demand for a good or service by an individual consumer

total demand of all consumers for a good or service

for most products, quantity sold varies inversely with price

responsiveness of quantity demanded due to a change in price

where percentage change in quantity demanded is greater than percentage change in price

where percentage change in quantity demanded is smaller than percentage change in price

willingness and ability of producers to supply a good or service at a given price in a given period of time

supply of a good or service by an individual producer

total value of all individual supply added together

quantity supplied varies directly with price

responsiveness of quantity supplied due to a change in price of the product

when percentage change in quantity supplied is greater than the change in price

when percentage change in quantity supplied is less than percentage change in price

sum of money you have to pay for a good or service - determined by market forces of supply and demand

value placed on a good or service by an individual

how scarce resources are distributed amongst producers and how scarce goods and service are distributed amongst consumers

interaction of the free market forces of supply and demand to establish a general price level for a good or service

where quantity supplied exactly matches quantity demanded

factors that determine price levels and the availability of goods and services in an economy without government intervention

price changes signal where resources are needed, if demand for a good rises, its price will rise, signalling more resources should be devoted to producing this good

higher prices encourage the business to produce more businesses profit from producing what consumers want

prices help ration scarce resources - when resources are scarce, prices rise, so only those willing and able to pay are allocated these resources

when different firms are trying to sell a similar product to a consumer

sole producer of a good or service - legally if they own 25% of the market

where a small number of firms dominate a market

total output of goods and services produced by a firm or industry in a given time period

output per unit of input - efficiency in use of factors of production

costs that do not change with output

costs that vary with output

cost of producing one unit

total cost/output

total income of a firm from the sale of goods and services

price x quantity sold

revenue per unit sold

total revenue / quantity sold

amount of money a producer is left with after all costs have been paid - when total revenue is greater than total cost

when a firm's revenue is less than its costs

cost advantages a firm can gain by increasing the scale of production., leading to a fall in average costs

due to the growth of the firm itself

those a firm benefits from as a member of an industry or those which are outside of its control

where workers sell and employers buy labour - interaction of the two gives the price of labour (wage rate), and quantity supplied and demanded

when the demand for labour depends on the demand for the product the labour helps to produce

the amount of money an employee earns before taxes and other deductions are made

amount of money an employee receives after deductions are made from gross income

tax directly levied on personal income

contribution paid by workers and their employers towards state benefits

fixed amount paid at regular intervals to a usually retired person

anything generally accepted as a means of payment - a medium of payment

consists of financial organisations and their products, involves the flow of capital

anything that sets the standard value of goods and services and is acceptable to all involved in the transaction

a mutual financial institution that is owned by its members with the objective to receive deposits from its members and lend money to other members to purchase property

financial institution that guarantees compensation for a specified loss, damage, illness or death in return for an agreed premium

credit is when consumers, producers and government can borrow money to buy goods and services without having to save up

liquidity - how easy it is to turn an asset into cash - bank allows consumers and producers to function when faced with unexpected demands for cash by offering loans and overdrafts

finance managers group many savers together and invest into a range of companies - individual investors would not be able to do this on their own and would invest in a smaller range of companies, increasing risk

agreement with a financial institution to borrow money to purchase a property

cost of borrowing and reward for saving

the purchase of capital in order to produce future goods and services

total value of goods and services produced in a country in a year

growth in the value of output over time

GDP / population

period of negative economic growth for two or more consecutive quaters

period of high economic activity and employment

number of people who work in an economy

use of labour in the economy to produce goods and services

occurs when workers willing and able to work at the current wage rates are not able to find employment

method of measuring unemployment according to the number of people claiming unemployment-related benefits

number of people in the working population who are unemployed