Economics - key terms (24 Cards)
 by Issy Peacock
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1 A production posibility diagram Shows the maximum possible output combinations of 2 goods or services the economy can achieve when all resources are efficiently used.
2 Capital good Goods that make consumer goods or services
3 Capitalism The concept that individuals should have private control over industry/land/capitial.
4 Command economy The government largely determines what is produced and in what amount.
5 Consumer good Goods that satisfy the needs and wants of people directly
6 Deregulation The reduction or elimination of government power in a particular industry.
7 Economics A social science that studies the production, distribution or consumption of goods or services.
8 Factors of production The inputs available to supply goods or services to the economy. eg. land, capital, enterprise and labour.
9 Finite resource A resource that will eventually run out.
10 Free good Customer-satisfying goods made from free resources that don't impose an opportunity cost on society.
11 Macroeconomics The study of the national economy.
12 Market economy Consumers and businesses decide what they want to produce and purchase in the marketplace.
13 Marketisation/Commercialisation The process of transforming an entire economy away from a planned economic system and toward greater market-based organization.
14 Microeconomics The study of economics within a small firm or specific market
15 Mixed economy Where both market forces and government determine which goods and services are produced and how they are distributed.
16 Normative statement A subjective statement that carries value judgements.
17 Opportunity cost The benefits forgone of the next best alternative.
18 Positive statement An objective statement that can be tested using available evidence.
19 Privatisation The process of transferring an enterprise or industry from the public sector to the private sector.
20 Production The action of making or manufacturing components.
21 Renewable resource A resource that will never run out.
22 Socialism A concept where individuals shouldn't own land/firms/capital but the whole community should.
23 Technical process An economic measure which seeks to explain changes in the level of economic output in terms of the level of technical progress and innovation.
24 The economic problem The wants and needs of society are endless but the resources to satisfy these are finite.