Economics: Scarcity and Choice Concepts

The economic problem that resources are insufficient or limited to satisfy unlimited human needs and wants.

What is produced and what is sacrificed.

Best possible use of scarce resources to avoid waste.

<p>Concept referring to satisfaction of economic situation.</p> Signup and view all the answers

<p>Sustaining a particular activity/policy.</p> Signup and view all the answers

<p>The idea that economic decision makers rely and interact with each other.</p> Signup and view all the answers

<p>Typically government intervention, gov involving in market</p> Signup and view all the answers

<p>Land, Labour, Capital, Entrepreneurship (D)</p> Signup and view all the answers

<p>The next best alternative that must be sacrificed/forgone to obtain something else when an economic decision is made.</p> Signup and view all the answers

<p>Air (D)</p> Signup and view all the answers

<p>A model that shows the maximum combination of any two goods which an economy could produce if all of its resources were fully employed and used efficiently. Points on the curve are called production possibilities and the level of technology is fixed.</p> Signup and view all the answers

<p>Increase in quantity of output produced in an economy over a period of time. Increases GDP and is short term.</p> Signup and view all the answers

<p>A multidimensional concept that relates to the increase in standard of living and quality of life (e.g. greater availability of technology). is long term.</p> Signup and view all the answers

<p>Economic development leads to economic growth (D)</p> Signup and view all the answers

<p>economic issues that can be studied looking at facts</p> Signup and view all the answers

<p>Ceteris paribus and rational economic decision making (A)</p> Signup and view all the answers

<p>Gross Domestic Product, the dollar value of all final goods + services produced within an economy (produced in a country's borders) in a given year</p> Signup and view all the answers

<p>A measure of the responsiveness of the quantity demand for a product to changes in its own price</p> Signup and view all the answers

<p>A change in price of a good/service leads to a proportionally smaller change in the quantity demand of it (0 &lt; PED &lt; 1)</p> Signup and view all the answers

<p>A change in price of a good/service leads to the same change in the quantity demand of it (PED = 1)</p> Signup and view all the answers

<p>Vertical Line (A)</p> Signup and view all the answers

<p>The responsiveness of demand and hence quantity demanded of a product to changes in income</p> Signup and view all the answers

<p>A measure of the responsiveness of the quantity supplied for a product to changes in its own price</p> Signup and view all the answers

<p>an allocation of resources that results in producing the combination and quantity of G&amp;S most preferred by the society. It is achieved when the economy allocates its resources so an equilibrium and pareto optimum is reached and social welfare is maximised</p> Signup and view all the answers

<p>The quantity of a good or service that consumers are willing and able to buy at a certain price during a certain time period, ceteris paribus</p> Signup and view all the answers

<p>As the price of a product increases, the quantity demanded of it will usually decrease, ceteris paribus, vice versa.</p> Signup and view all the answers

<p>As the price of a product increases, the quantity supplied of it will usually increase, ceteris paribus, vice versa</p> Signup and view all the answers

<p>The system by which the forces of demand and supply determine the prices of products</p> Signup and view all the answers

<p>Resource allocation function and rationing function (B)</p> Signup and view all the answers

<p>signals + incentives -&gt; new equilibrium from temporary disequilibrium</p> Signup and view all the answers

<p>Output is received by those who are willing and able to buy them</p> Signup and view all the answers

<p>State of balance between different forces (demand + supply) such that there is no tendency to change</p> Signup and view all the answers

<p>Goods arising directly from the use of natural resources, or the factor of production 'land'</p> Signup and view all the answers

<p>Goods produced from raw materials through manufacturing processes.</p> Signup and view all the answers

<p>A tax levied on the expenditure of products by the government to generate government revenue</p> Signup and view all the answers

<p>Financial assistance given by the government to producers in order to reduce cost of production.</p> Signup and view all the answers

<p>The difference between the price consumers are willing and able to pay for a good or service and the price they actually pay.</p> Signup and view all the answers

<p>S (substitutes) P (proportion of income) L (luxury or necessity) A (addictive/habit forming) T (time to respond) (C)</p> Signup and view all the answers

<p>The setting of minimum or maximum prices by the government so that the prices are unable to adjust to the equilibrium price determined by D&amp;S.</p> Signup and view all the answers

<p>Legal maximum price set below equilibrium price to be effective and prevent producers from selling the product above it (to make goods more affordable to people on low incomes), set by gov</p> Signup and view all the answers

<p>Legal minimum price rest above equlibrium price to be effective and prevent producers from selling products below it (provide income support to farmers or to increase the wages of low-skilled workers), set by gov</p> Signup and view all the answers

<p>How a market economy (free markets) fails to achieve the correct outcomes for individuals and society.</p> Signup and view all the answers