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16 Cards in this Set
- Front
- Back
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Oppotunity Cost
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The next best alternative forgone when an economic decision is made
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Economic Goods
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Goods that are scarce and therefore have an opportunity cost
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Free Goods
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Goods that have no opportunity cost for example air
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Factor Market
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The market for the factors of production that make other goods and services suc as labour or raw materials
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Renewable Resources
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Resources that are able to be replenished over time, whereas non-renewables such as oil or gas are likely to run out.
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Profit
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When total income or revenue for a firm is greater than total costs.
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Free Market Economy
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One in which there is very limited government involvement in providing goods and services. its main role is to ensure that the rules of the market are fair so that, for example, people cannot steal each others' property
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PPF/PPB
Production Possibility Frontier/Boundary |
This indicates the maximum possible output that can be achieved given a fixed set of resources and technology in a particular time period
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Productive Efficiency
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When a firm operates at minimum ATC (average total cost), producing the maximum possible output from inputs into the production process
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Allocative Efficiency
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achieved in an economy when it is not possible to make anyone better off without making someone worse off, or you cannot produce more of one good without making less of another
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Productivity
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a measure of efficiency, measuring ratio of inputs to outputs; the most common measure is labour productivity, which is output per worker
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Human capital
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the skills, abilities, motivation and knowledge of labour. Improvements in human capital raise productivity and can shift PPB to the right
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Division of Labour
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Breaking the production process down into a sequence of tasks, with workers assigned to particular tasks
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Specialisation
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the production pf a limited range of goods by an individual factor of production or firm or country in cooperation with others so that together a complete range of goods is produced
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Normative Statements
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Opinions that require value judgements to be made
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Positive Statements
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Statements that can be tested against real world data (evidence/facts)
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