economic problem
when unlimted wants exceed limited resources
Land
Natural resources used up in production
Labour
Physical or mental effort put in by an individual to produce a good or provide a service.
Capital
Man-made resources that help produce goods and services
Enterprise
Ability to bring all these factors together to set up a firm. People who do this are called entrepreneurs.
Land
Natural resources used up in production
Labour
Physical or mental effort put in by an individual to produce a good or provide a service.
Capital
Man-made resources that help produce goods and services
Enterprise
Ability to bring all these factors together to set up a firm. People who do this are called entrepreneurs.
Wages
The reward for labour - People supply their labour to firms in return for a payment in wages. Could be paid per hour of labour, week, etc or for every task they complete.
Rent
The reward for land - Owners of the land require the payment of rent to supply these resources to firms.
Interest
Interest is paid to the people and organizations that supply or invest capital in firms.
Profit (reward)
The reward for entrepreneurs for successfully organizing production in a firm.
Opportunity cost
The next best alternative foregone
PPC
The maximum combination of any two goods that an economy can produce with all available resources, assuming a fixed level of resources and technology
Demand
The want and willingness of a consumer to buy goods and services
Non price determinants of demand
Income
income tax
Change in preferences
Price of compliment goods
Price of substitute goods
Advertisements
ITS CAP
Supply
The amount of a good or service firms or producers are willing to produce and sell at different prices
Market equilibrium
When quantity demanded is equal to quantity supplied and the market is cleared
Market disequilibrium
When quantity demanded is not equal to quantity supplied and there is either a surplus or shortage of supply
PED
Responsiveness of consumers demand to the change in price of a good or service
Determinants of PED
SPLAT
Substitute
Proportion of income
Luxury or necessity
Addictive
Time
What is PES
Responsiveness of quantity supplied to a change in price
Determinants of PES
Time period required to adjust the scale of production
Spare production capabilities and capacity
Mobility of factor of production
The availability of spare stock.
ST/TM
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1.1 - Nature of economic problem + types of goods9
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1.2 Production16
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1.3 + 1.4 Opportunity cost and PPC9
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2.2: Allocation of resources9
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2.3 Demand16
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2.4 Supply10
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2.7 PED17
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2.8 PES10
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2.9 Market economic system5
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2.10 Market Failure18
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2.11 - Mixed economic systems + government intervention18
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3.1 A - Money19
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3.1 B - Banking33
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3.2 Households30
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3.3 Workers31
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3.4 Trade Unions40
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3.5 Firms39
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3.5 (B) - economies and diseconomies of scale20
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3.6 Firms and production20
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3.7 Firms' costs, revenues, and objectives16
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3.8 Market structure20
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4.1 + 4.2 Roles of Govt25
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4.3 Taxation42
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4.3 fiscal policy10
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4.4 monetary policy23
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4.5 supply side policy29
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4.6 economic growth27
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4.6 (B) Economic Recession21
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4.7 employment and unemployment39
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4.8 inflation and deflation26
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4.8 (2) CPI4
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5.1 Economic Development15
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5.2 Living standards12
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5.3 poverty16
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5.4 population35
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6.2 Globalisation + free trade27
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6.1 specialisation10
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6.3 forex rate31
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6.4 - Current Account of Balance of Payments13
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Eco Definitions39
