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30 Cards in this Set
- Front
- Back
Labour
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Human resources - include qualities boosted by education, training & experience
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Land
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All natural resources. Incl land, space above & airways, the sea, mineral wealth
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Capital
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Any man-made resource - incl. buildings, plant , machinery, equipment & tools.
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Financial capital
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Money
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Capitalist economies
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Society where private ownership of capital occurs
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Ongoing process of adding to stock of capital
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Investment
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Enterprise
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ecnomic resource as shown by entrpreneurs
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Economic resources (4)
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Labour, Land, Capital, Enterprise
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Return to owner from labour
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Wages
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Return to owner from land
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Economic rent
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Return to owner from capital
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Profit/Interest
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Return to owner from enterprise
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profit
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Scarcity
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the lack of resources to meet society's demands upon them
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Opportunity cost
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the sacrifice of the next best, or most rewarding alternative, use of a resource.
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Free market system
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Where all resources are privately owned and those goods & resources are distributed according to their prices, which effectivelt rations them.
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What did Adam Smith, in Wealth of Nations (1776), describe with regards to the free market mechanism?
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the 'invisible hand' which caused individual decisions to operate for the economic advantage of society.
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Central planning system or command economy
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..concentrates the decision-making process and the organisation of resources to a central authority.
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Georgist system - Henry George's two main questions.
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1) Why poverty exists in resource-rich economies.
2) Why resource-rich economies slide into cyclical depression. |
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Basis of Georgist system
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100% taxation of the annaul rental value of land combined with a corresponding reduction in taxes on the returns of both capital & labour.
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Definition of mixed economies
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Exist where elements of the free market & central planning systems are combined to varying degrees.
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Positive statements
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Can be tested for proof with reference to factual information.
'is' |
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Normative statements
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Are subjective value judgements
'should' |
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Microeconomics
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Study of of small-scale elements of economies - consumers, firms, resource owners, industry markets.
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Macroeconomics
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Study of large-scale elements of the economic system and between national economies.
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Economic problems are caused by...
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...scarcity of resources.
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Economic choices involve...
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...opportunity cost.
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Arbitrage
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trading activity based on buying where a product is cheap and selling where it has a higher price.
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Distortions
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outcomes in economy that prevent market forces giving the best outcome.
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Externalities
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costs or benefits of an economic activity that fall on people not directly involved.
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Incentives
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what drives people to make the choices they do.
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