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AICE Econ AS Unit 1
Review of terms and concepts from Unit 1 of AICE Econ AS Level
| Term | Definition |
|---|---|
| Scarcity | The concept that resources are on unlimited and choices must be made. |
| Trade Off | Every choice has an unlimited number of alternatives. |
| Opportunity Cost | Whenever we make a choice, this is the next best alternative. |
| The Economic Problem | What to produce, how to produce it and who gets it once it is made. |
| Land | The factor of production that includes natural resources. |
| Labor | The factor of production concerning paying people to provide a good or service. |
| Capital | The factor of production concerning man-made aids to production |
| Enterprise | The factor of production concerning the creation of new producing companies. |
| Positive Statement | A verifiable statment of fact. |
| Normative Statement | A statement based on an opinion. |
| Ceteris Paribus | A latin phrase meaning "all other things being equal". |
| Division of labor greatly increases... | Effiency and total output. |
| Market Economy | An economy where resources are allocated by the price mechanism of supply and demand. |
| Command Economy | An economy in which the government makes most decisions about how resources are used. |
| Mixed Economy | Essentially all economies in the world today. Decisions about resource usage are made in part by the market and by the government. |
| Liquidity | How easy wealth is to spend. |
| Capital Good | Goods used to produce other goods and services. |
| Consumer Goods | Goods the people buy and then use up. |
| Medium of Exchange | A feature of money. All sellers are willing to accept it as payment for goods and services. |
| Unit of Account | Feature of money. Gives a standard unit for prices to be understood. |
| Store of Wealth | Feature of money. Money can be held over time without losing its value. |
| Coincidence of Wants | The main barrier to trade. Both parties in a trade have to value and desire what the other has. |
| Production Possibilities Curve (PPC) | A graph showing the opportunity cost of resource allocation. |
| Production Possibilities Frontier (PPF) | The name of the line of a PPC that shows production a peak efficency. |
| Inefficient Production | When production on a PPC is graphed inside the PPF the economy is described as... |
Created by:
M.Brock
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