Term
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Definition
| Resources are finite, wants are infinite |
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Term
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Definition
| The way in which an economy decides to allocate its resources and the ownership of those resources |
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Term
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Definition
| Land, labour, capital and enterprise |
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Term
| Non-Renewable Resource/Economic Goods |
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Definition
| One whose stock level is decreased over time as it is consumed eg fossil fuelds, steel, copper |
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Term
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Definition
| Statement that contains an opinion, usually contains words such as "should", "ought to" etc. |
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Term
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Definition
| Value of the next best alternative forgone as a result of a choice made |
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Term
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Definition
| Statement that can be proved or disproved |
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Term
| Production Possibility Frontier |
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Definition
| Shows all possible combinations of two goods which can be produced in an economy using all of its resources to maximum efficiency |
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Term
| Renewable Resource/Free Goods |
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Definition
| One whose stock level can be maintained over a period of time eg solar energy, wind power, water, oxygen |
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Term
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Definition
| Lack of a certain resource due to the inability to obtain it |
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Term
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Definition
| Machinery, equipment, factories etc. Produces consumer goods |
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Term
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Definition
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Term
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Definition
Decisions on what, how and for whom to produce are left to the operation of the price mechanism.
Resources are privately owned.
Minimum government intervention.
High levels of competition |
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Term
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Definition
| Decisions on what, how and for whom to produce are made partly by the private sector and the government. |
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Term
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Definition
| If price for a good rises then people substitute this item with a cheaper product eg. a rise in the price of coffee may cause an increase in the demand for tea |
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Term
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Definition
| Incomes remain the same but prices rise so people spend less therefore demand falls |
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Term
| Extension of Demand/Supply |
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Definition
| Movement along the curve to the right |
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Term
| Contraction of Demand/Supply |
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Definition
| Movement along the curve to the left |
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Term
| Non-Price Factors Affecting Demand |
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Definition
Advertising
Fashion/Trends
Income
Seasonal demand |
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Term
| Non-Price Factors Affecting Supply |
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Definition
Availability of resources
Technology
Competition
Government policies
Environmental issues |
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Term
| Effect on Equilibrium - Increased Demand |
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Definition
| Demand curve shifts to the right |
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Term
| Effect on Equilibrium - Increased Supply |
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Definition
| Supply curve shifts to the right |
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Term
| Effect on Equilibrium - Decreased Demand |
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Definition
| Demand curve shifts to the left |
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Term
| Effect on Equilibrium - Decreased Supply |
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Definition
| Supply curve shifts to the left |
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Term
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Definition
Steep, negative gradient: percentage change in price leads to smaller percentage change in quantity demanded; elasticity is less than 1
[image] |
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Term
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Definition
| Shallow, negative gradient: percentage change in price leads to a larger percentage change in quantity demanded; elasticity is greater than 1 |
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Term
| Price Elasticity of Demand |
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Definition
| The responsiveness in the demand for a good due to a change in its price |
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