Aqa Economics 3.1.1

Front 1

Micro - Economics

Back 1

Solving or studying issues at a small level but in detail. E.g Firms.

Front 2

Macro - Economics

Back 2

Solving or studying global/country level economics as a whole.

Front 3

Normative statement

Back 3

Normative statements express an opinion about what ought to be. They are subjective statements. They carry value judgements, e.g the level of duty on petrol is too unfaire and unfaily penalises motorists.

Front 4

Postitive statement

Back 4

Objective statement that can be tested or rejected by referring to the available evidence. Positive economics deals with objective explanation. E.g "A rise in consumer incomes will lead to a rise in demand for new cars."

Front 5

Economic Problem

Back 5

The Basic Economic Problem is about scarcity and choice.

What goods and services to produce, how best to produce it and who should receive it.

Front 6

Opportunity cost

Back 6

The cost of any choice in terms on the next best alternative being sacrificed.

Front 7

Production Possibility Frontier

Back 7

A boundary that shows the combinations of two or more goods and services that can be produced using all available factors effectively.

Front 8

Consumer goods

Back 8

Products purchased for consumption by the average consumer. They are also the end result of production and manufacturing and are what a consumer will see on the store shelf.

Front 9

Capital goods

Back 9

Capital goods such as a plant (factories) and machinery and equipment are useful not in themselves but for the goods and services they can help produce in the future.

Front 10

Factors of production

Back 10

The resources LAND, LABOUR, CAPITAL and ENTERPRISE used to produce goods and services.

Front 11

Land

Back 11

Natural resource available for production.

Front 12

Labour

Back 12

All human exertion in the production of wealth and services.

Front 13

Capital

Back 13

The finance raised to operate the business. Refers to machine, roads, factories, schools and office blocks.

Front 14

Enterprise

Back 14

The entrepreneur provides the initial ideas and organises the others 3 factors of production.

Front 15

Command economy (Planned)

Back 15

An economy system where all resources are allocated by the government with no market (E.g North Korea)

Front 16

Market economy

Back 16

System of buying and selling that is not under the control of government, where people can buy and sell freely, or an economy where free markets exist, and most companies and properties are not owned by the state.

Front 17

Mixed economy

Back 17

Where resources are partly allocated by the market and partly by the government.

Front 18

Capital Intensive Techniques

Back 18

A production technique which uses a high proportion of capital to labour. It is highly automated and to be used on a large scale.

Front 19

Labour Intensive Techniques

Back 19

A production technique which uses a high level of labour to capital. Produce individual or personalised products, or to produce on a smaller scale.

Front 20

Economic activity

Back 20

Actions that involve the production distribution and consumption of goods and services at all levels within society.

GDP Inflation and interest rates are ways of assessing economic activity.

Front 21

Free goods

Back 21

A free good is a good that is naturally abundant in supply and needs no conscious effort to obtain it.

Front 22

Economic goods

Back 22

A consumable item that is useful to people but scarce in relations to its demand, so that human effort is required to obtain it.