Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
FA1 Economics
FA1 terms chapters 1-4
| Question | Answer |
|---|---|
| Economics | study of ways society decides to use scarce resources to satisfy unlimited wants |
| Economic system | organizational structure which decides which wants to satisfy and how to allocate resources |
| relative scarcity | we do not have enough resources to satisfy all of our wants and needs |
| scarcity | not enough resources to satisfy want. This is a universal problem for humans to solve |
| value judgement | a personal evaluation. what ought to be vs what it is |
| ceteris paribus assumption | "all things being equal" |
| competitive wants | goods/services that can be substituted |
| complementary wants | wants that go together |
| economic growth | increase in productive capacity over time |
| needs | things essential to survival |
| wants | things we desire for satisfaction |
| opportunity cost | best alternative opportunity given up when a choice is made |
| productivity | a measure of efficiency. rate of output |
| recurrent wants | wants that are never satisfied |
| allocative efficiency | a country's resources are used to create the maximum benefits for the country |
| capital | factor of production: human made tools |
| enterprise | a factor of production, initiate and manage other factors |
| entrepreneur | innovator that starts the productive process |
| factors of production | categories that produce goods and services |
| labour | factor of production, human efforts |
| land | factor of production, gifts of nature |
| technical efficiency | resources generate the maximum output |
| consumer sovereignty | ability for consumers to determine production through spending decisions |
| government intervention | how the government allocates resources and operates within the economy |
| market | a place where buyers and sellers interact for trade |
| Consumption Expenditure | total spending in the household sector (C) |
| Disequilibrium | Injections and leakages are not equal, which leads to changes in employment, output and expenditure |
| Economic Model | simplification of a complex situation in the form of a diagram, graph or equation |
| Exports | goods and services sold to foreign countries (X) |
| Income | payments to households through wages, interest, rent or profit (Y) |
| Imports | goods purchased from foreign countries (M) |
| inequality | differences in welfare (income, wealth or opportunity) |
| Injection | expenditure added to the circular flow of income |
| investment | spending on new assets or stocks in production (I) |
| Leakage | expenditure taken from the circular flow of income |
| Production | combining land, labour, capital and enterprise to provide goods and services to the economy |
| savings | income not spent on consumption, set aside (S) |
| sectors | divisions of the circular flow of income |
| subsidies | money paid by the government, helps compete with imported goods |
| taxation | compulsory payments to the government, finances government activities (T) |
| welfare | a measure of how well off people are |
| Consumer Price Index (CPI) | changes in prices over time, measures inflation |
| Current account | inflows and outflows of money |
| equilibrium | injections equal leakages |
| Gross Domestic Product (GDP) | value of goods produced in an economy. Health of the economy |
| Unemployment | not currently working |
| aggregate demand | total expenditure on goods and services at one time |
| Consumption expenditure | total spent on the housing sector (C) |
| Disposable income | amount of income available after tax |
| Government expenditure | total spending by the government (G) |
| Net exports | income of exports – imports |
| boom | phase of the trade cycle, full employment and high inflationary pressure |
| downswing/recession | slowing of aggregate demand, high levels of uncertainty |
| paradox of thrift | people save money during a recession, which leads to less economic growth |
| recession/trough | phase of the economic cycle, high unemployment, low business and consumer confidence and low inflation |
| upswing/recovery | high prosperity with increasing business and consumer confidence |
| balanced budget | T=G |
| Deficit budget | T<Ｇ |
| Basis point | measurement of interest rates |
| fiscal policy | action by the government to raise revenue and aggregate demand (tax and subsidies) |
| discretionary fiscal policy | deliberate action to meet economic objectives |
| internal stability | full employment and price stability in an economy |
| surplus budget | T＞G |
| monetary policy | actions by the RBA |
| Market | a place where buyers and sellers trade or exchange |
| price | the sum of money paid for goods and services |
| price mechanism | the system where price changes bring about equality between supply and demand in the market |
| demand | quantity of a commodity that will be purchased in market over a period of time at a given price |
| equilibrium | a balanced situation that has no tendency to change. supply = demand |
| law of demand | the quantity demanded of a good increases as the price decreases |
| propensity | a person's tendency or desire to act in a certain way |
| utility | satisfaction gained by consuming a good or service |
| law of supply | the quantity of a good supplied goes down as the price decreases |
| Marginal producer | A firm whose income just covers cost |
| supply | the quantity of a commodity for sale in a market at a given price |
| incentive | something that motivates |
| microeconomics | a branch of economics that involves behavior and decision making by small units (individuals and firms) |
| demand | schedule a list or graph that shows quantity demanded at all possible prices in a market |
| invisible hand | unobservable market force that allocates resources based on consumers acting in their self–interest, automatically reaches equilibrium |
| Australian Securities Commission | national business that operates the stock market |
| Dividend | payment made by a firm to shareholders for providing capital |
| float | initial raising of capital for a firm by selling shares to the primary market |
| primary market | shares are sold by stockbrokers, new stocks |
| secondary market | shares sold by stockbrokers, older stocks |
| share | part ownership of a company |
| stockbroker | an agent of the ASX, authorized to buy and sell stocks |
| stock market | market to auction securities (shares, or bonds) |
| Elastic demand | Willingness to find substitutes as prices change |
| Elasticity | relative amount that a variable changes due to a change in another variable |
| inelastic demand | Willingness to buy regardless of the change in price |
| price elasticity of demand | the responsiveness of quantity demanded to a change in price |
| unit elasticity | where the percentage change in quantity demanded is the same as the percentage change in price |
Created by:
user-1813225
Popular Economics sets