Economics Production Igcse

Front 1

commodities

Back 1

goods and services

Front 2

production

Back 2

the makings of commodities

Front 3

input

Back 3

land, labor, and capital

Front 4

output

Back 4

goods and services

Front 5

profit

Back 5

reward to entreprenuers for taking a risk and setting up a firm

Front 6

loss

Back 6

can't cover its costs with its sales revenue

Front 7

economic profit, pure profit

Back 7

business profit minus oppurtunity cost (2 terms)

Front 8

businesses that don't aim for profit (3)

Back 8

providing a public service by gov

charity

nonprofit orgs like building societies

Front 9

self-sufficiency

Back 9

every person produced everything he/she needed or wanted

Front 10

division of labor

Back 10

a way in which each worker specializes in a specific task

Front 11

division of labor advantages (4)

Back 11

many goods and services ->repetition increases skill and speed

everyone's abilities/talents are made full use of

time is saved- none wasted from switching activities

allows machinery, like robots painting cars

Front 12

division of labor disadvantages and possible solutions(4)

Back 12

work becomes boring- breaks and music

workers feel alienated/pride of completing something isn't there- allowing them do a greater task variety

too much dependency

products standardized and dull

Front 13

mass production

Back 13

production process that aims to use the fewest workers and the lowest cost possible to produce the largest amount of goods possible

Front 14

time periods, runs (3)

Back 14

momentary run- firm will not be able to increase production at all

short run- only able to increase labor, no land or capital

long run- firm employs more of all factors of production

Front 15

total product

Back 15

total output

Front 16

average product

Back 16

the average output a worker produces

Front 17

marginal product

Back 17

the amount the total product is raised by

Front 18

law of diminishing returns

Back 18

if one factor of production is fixed in supply and extra units of another factor are added, the extra output gained per extra unit will after a while diminish.

Front 19

how to calculate marginal product

Back 19

change in total product divided by change in number of workers

Front 20

scale of production

Back 20

the size of a firm

Front 21

plant/factory

Back 21

the site at which a good is produced

Front 22

firm

Back 22

business unit that owns one or more plants

Front 23

industry

Back 23

group of firms producing same good

Front 24

average revenue how to calculate

Back 24

total revenue divided by number of goods sold

Front 25

break even point of production

Back 25

when total cost = total revenue

Front 26

marginal cost

Back 26

cost of producing one more item

Front 27

depreciation

Back 27

the decrease in value of the capital caused by wear and tear over time

Front 28

optimum point of production, after that, costs increase again, why

Back 28

average cost is at the lowest level possible

possible increase reasons: supplier runs out, law of diminishing returns

Front 29

average cost curve graph

Back 29

a bowl shape, optimum pt at lowest pt

Front 30

increasing/decreasing/constant returns to scale

Back 30

if a firm doubles its imput

...more than doubles its output, increasing

...less than doubles its output, decreasing

...doubles its output, constant

Front 31

financial econs of scale (3)

Back 31

borrow money from lotsa diff. sources, plus can raise more from selling stocks.

have lots of assets to offer lenders if they can't repay the loan

low risk- less fees

Front 32

marketing econs of scale (4)

Back 32

can buy in bulk and store them at discounts

can afford to employ specialist buyers

specialist sales staff

advertising spread over very large output

Front 33

technical econs (5)

Back 33

specialist workers and machines

r&d

large types of transport like juggernauts

Front 34

risk bearing econs of scale (2)

Back 34

buying from lotsa suppliers to prevent something happening to a supplier from affecting them too much

sell a variety of goods in case consumers stop buying one (diversification)

Front 35

external econs of scale/ econs of concentration

Back 35

skilled labor

ancillary firms- firms that'll help them will locate near by

cooperation

Front 36

small firm (3)

Back 36

small share of market

personalized management

independent

Front 37

why small firms? (3)

Back 37

small market

can cooperate

gov helps them

Front 38

small market because...

Back 38

local- only one for miles around

caters to a specialized good/service

high priced luxury items

personal service

supplies component parts to large firms

Front 39

why nationalization

Back 39

control natural monopolies

safety

protect employment

maintain public service where they would operate at a loss

Front 40

why privatization

Back 40

improve quality and lower prices cuz of competition

wider variety

sale of shares raises revenue for gov. to lower taxes

owning shares- ppl still get a say in company

Front 41

market failure

Back 41

fails to make best use of resources because of external costs

Front 42

perfectly competitive market (4)

Back 42

homogeneous product

buyers and sellers don't affect price

perfect info

no barriers of entry or exit

Front 43

perfect competition, why perfect?

Back 43

low prices

efficient

consumer sovereignity

Front 44

monopoly (6)

Back 44

no competition

abnormal profits

price makers

create barriers to entry

imperfect info

non homogeneous products