Economics Key Terms

A person or organization that directly uses a good or service

A tangible product i.e. a product that can be seen or touched

A political authority that decides how a country is run and manages its operation

A person, company, or country that makes, grows, or supplies goods and/or services

An intangible product i.e. a product that cannot be seen or touched

The resources in an economy that can be used to make goods and services (CELL)

The factor of production concerned with the workforce of an economy

The factor of production concerned with natural resources of an economy

The factor of production that relates to the human made aids to production e.g. machinery

The Factor of production that takes a risk (the entrepreneur) in organising the other 3 factor of productions

How factors are reliant on one another

When there is an insufficient amount of something to satisfy all wants

The infinite desire for something

Something a consumer has to have to survive e.g. water/food

Something a consumer would like to have but which is not essential for survival

How to best use limited resources to satisfy the unlimited wants of people

The next best alternative given up when making a choice

An option for the use of selected scarce resources

The best use of resources in order to create responsible developmnet or growth that promotes an improvement in quality of life for all, now and into the future

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

The impact of development or growh where the effect on the enviroment is small and possible to manage, now and into the future

A way of bringing buyerd and sellers to buy and sell goods and services

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

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

All activities in an economy that are concerned with either manufacturing or construction

All activities in an economy that include the idea of a service

Market in which the services of the factors of production are bought and sold

Market in which final goods and services are offered to consumers, buisnesses and the public sector

The giving up of something that the individual or firm has, in return for something they wish to have but do not possess

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

Where workers specialise in, or concentrate on one area of the production process

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

The deman for a good or service by an individual consumer

For most products the quantity demanded varies inversely with its prices

The total deman for a good or service found by adding together all individual demands

When the price changes, leading to a movement up (expansion) or down (contraction) the existing demand curve

A complete shift of the existing demand curve either to the right (increased demand) or to the left (decreased demand)

An amount of money the government gives directly to firms to encourage production and consumption

A compulsory payment to the government

When the percentage change in quantity is greater than the percentage change in price (price sensitive customers)

When the percentage change in quantity demanded is less than the percentage change in price (customers are not price sensitive)

The responsiveness of quantity demanded to a change in price of a product

For most products the quantity supplied varies directly with its price

The ability and willingness of firms to provide good and services at each price in a given time period

The supply of a good or service by an individual producer

The total supply of a good or service as a result of adding together all individual producers supplies

When the price changes, leading to a movement up (expansion) or down (contraction) on the existing supply curve

The complete shift of the existing supply curve either to the right (increased supply) or to the left (decreased supply)

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

When the percentage change in the quantity supplied is less than the percentage change in price.

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

The sum of money you have to pay for a good or service. It is determined by the interaction of supply and demand

The optimal production and distribution of scarce resources

Where the quantity supplied exactly matches the quantity demanded

How scarce resources are distributed among producers, and how scarce goods and services are allocated among consumers

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

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

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

A sole producer or seller of a good or service

Where a small number of firms control the large majority of market share

The amount of money left after all costs have been paid total revenue - total costs

A measure of efficiency in the use of factors of production in the production process. The output per unit of input

The cost of producing a unit - unit cost of production total cost/nmber of units

All the costs of the firm added together

The total income of a firm from the sale of its goods or service selling priced x number of items sold

The revenue per unit sold total revenue/number of units sold

When a firm's revenue is less than its costs

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

Large firms can spread the risk by offering a range of products or services

Large firms can borrow money from the bank at a lower interest rate

Large firms can pay for bigger marketing campaigns which reach a larger audience

Large firms can buy the best machines and expertise which increases output

Large firms can afford to employ specialist managers

Large firms can bulk buy their raw materials

Doubling the dimensions of a shipping containers to increase capacity and reduce costs of transportation

Large firms can afford their own R&D departments, helping them stay ahead of competition

Where workers sell their labout and employers buy their labour

The total number of people who are willing and eligible to supply their labour, including the unemployed

The amount of money that an employee earns before any deductions are made

Money taken out of a persons pay bracket e.g. income tax/national insurance/pension contribution

A tax levied directly on personal income, i.e. a tax on a person's wages.

A contribution paid by workers and their employers, towards the cost of state benefits

The amount of money that an employee is left with after deductions are made from the gross income

A fixed amount paid at regular intervals to a person (usually retired), or their surviving dependants.

Anything that is generally accepted as a means of payment for a good or service

Anything that sets the standards of goods and services acceptable to all parties involved in a transaction

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

The purchase of capital goods that are used to produce future goods and services

The cost of borrowing money and the reward for saving money

A mutual financial institution that is owned by its members. Its primary objectives are to receive deposits from its members and to lend money for members to purchase property

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

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