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9 Cards in this Set
- Front
- Back
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What is the economic problem? |
There are unlimited wants and finite resources so those resources need to allocated efficiently |
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What is opportunity cost? |
The foregone value of the next best alternative when a choice is made |
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What does a PPF Curve represent? What can shift the PPF outwards? |
The maximum combinations of producing two types of goods by an economy. The PPF can be shifted via: Inc population; Improved technology; Inc skill of workers; Inc land; |
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What is the difference between capital and consumer goods? |
Capital goods are used to produce other goods however consumer goods are only able to be consumed. |
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What is Specialization? What is the division of labour? |
Specialization is the focusing of factors of production into specific goods or tasks Division of labour is the allocation of specific tasks to different workers in order to improve efficiency and output |
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What are the benefits of specialization What are the benefits of division of labour? |
1)Increased quality of production; Gains from trade; Less global competition(better negotiating power; Increased competition in the country(lower prices); Higher level of output. 2)Exponential increase in productivity; Workers increase skill and efficiency; Cost effective to provide specialist tools; time saved not constantly changing tasks; Workers can be placed in places best suited to them. |
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What are problems of specialization? What are problems of division of labour? |
1)Need a skilled workforce; Overspecialization leads to dependency on few industries -venezuela; Resources may not be used sustainably 2)Tedium - High employee turnover; Lack of motivation; over reliance on one/any worker; greater cost to firms(workers may see their output and demand higher wage as they're important to production) |
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What are the four functions of money? |
Medium of exchange - Acts as a common system of trade as it can be traded in the future. Measure of value - Gives a common scale for measuring value of goods. Storage of value - Money is generally stable, able to hold its value for long periods of time. Standard deferred payment - Money can be used as a standard of payments in the future too, making loans and credit a possibility. |
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What are the forms of money? |
Cash - Token money, currency Current Accounts - Debit cards, Credit cards Near monies - Assets which fulfill some aspects of money however aren't wholly liquid |
