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61 Cards in this Set
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Alfred Marshall's Definition of Economics |
A study of mankind in the ordinary business of life |
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Adam Smith's Definition of Economics |
An inquiry into the nature and causes of the wealth of nations |
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John Stuart Mill's Definition of Economics |
The practical science of the production and distribution of wealth |
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H.J Davenport's Definition of Economics |
The science that treats phenomena from the standpoint of price |
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A.C. Pigou's Definition of Economics |
The science of material welfare |
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Professor (Lord) Lionel C. Robbins' Definition of Economics |
The science which studies human behaviour as a relationship between ends and scarce means which have alternate uses |
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Want |
The insatiable desire or need of human beings to own goods or services that give satisfaction |
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Scarcity |
The limited supply of resources which are used for the satisfaction of unlimited wants |
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Scale of Preference |
The list of unsatisfied wants arranged in the order of their relative importance |
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Choice |
A system of choosing one out of a number of alternatives |
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Demand |
The quantity of goods and services consumers are willing and able to buy at alternative prices over a given period of time |
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Law of Demand (First Law of D&S) |
All things being equal, the higher the price, the lower the quantity of goods that will be demanded, the lower the price, the higher the quantity of goods that will be demanded |
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demand schedule |
a table that shows the relationship the price of a commodity and the quantity of the commodity demanded |
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demand curve |
a graph that shows the relationship between of the price and quantity of a commodity demanded |
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Factors Affecting Demand |
Price The price of other commodities Income of the consumer Changes in the taste of the customer Population Periods of Festival Expection of changes in price Taxation Changes in fashion |
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Supply |
The quantity of any commodity that the producers are willing and able to offer for sale at alternative prices over a given period of time |
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Law of Supply (Second Law of D&S) |
All things being equal, the higher the price, the higher the quantity of a commodity that will be supplied, the lower the price, the lower the quantity of the commodity that will be supplied |
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supply schedule |
a table that shows the relationship between the price of a commodity and the quantity supplied |
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supply curve |
a graph that shows the relationship between price of a commodity and the quantity supplied |
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Factors affecting supply |
Price Level of Technology Cost of production Government policy Weather Taxation Price of other commodities Number of producers Natural Disasters |
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Production |
the various economic activities aimed at the creation of goods and services and distribution of them to the final consumers for the satisfaction of human wants(; the creation of utility) |
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Types of Goods |
Consumer Goods: Goods and services that can satisfy a consumers immediate needs and do not require further production to be used by consumers Capital Goods: Goods used by people to produce other commodities and services (Examples: buildings, motor cars, lorries, machines) |
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Types of Consumer Goods |
Durable goods: Goods that can used over and over again before they become worn out Non-durable goods: Goods that can only be used once |
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Types of Production |
Direct Production: The type of production in which an individual produces goods and services only for family use or consumption Indirect Production: The type of production in which goods are services are produced on a large scale, mainly for the purpose of selling and exchanging for other needs |
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Types of Indirect Production |
Primary Production: The extraction of raw materials provided by nature Secondary Production: The conversion of basic raw materials or semi-finished goods into final forms Tertiary Production: The provision of commercial and professional services to the people |
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factors of production |
the resources that are combined together to produce goods and services •Land •Labour •Capital •Entrepreneur |
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Land |
a free gift of nature that includes the surface of the earth and natural resources |
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Labour |
All forms of human effort utilised in/put into production |
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Types of Labour |
Unskilled Labour: Labour that requires little or no formal education Skilled Labour: Labour that makes use of the mental effort of workers in productive activities |
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Capital |
Man-made assets (wealth or goods) used in production |
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Types of Capital |
Fixed Capital: Assets that are not used up in the course of production Working or Circulatory Capital: Assets that are used up in the course of production Current or Liquid Capital: Capital required for the day-to-day running of productive activities Social Capital: Capital provided by the government that aids production |
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The entrepreneur |
The factor of production that co-ordinates and organises other factors of production |
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Capital consumption |
The using up of existing capital stock and not replacing worn-out capital goods used in production |
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Capital formation or Accumulation |
Increasing a country's stock of real capital |
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Rewards for the Factors of Production |
Land --> Rent Labour --> Wages Capital --> Interest Entrepreneur --> Profit |
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Division of labour |
The breaking down of a production process into a number of separate operations, whereby each operation is performed by one person or a group of people |
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Specialisation |
The concentration of the productive efforts of an individual, firm, or country in a given aspect of economic activity or on a particular line of production in which it has the greatest advantage over others |
A blank man with his fingers on his temple concentrating (the concentration), arms sprout from his back and type on a computer and hold his phone to his face (productive effort), and one of his arms sticks Mr. Potatohead eyes in the ground (given an aspect) |
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Types of Specialisation |
•Specialisation by process Type of Specialisation process in which a production process is divided into different stages and each worker, firm, or country now concentrates on only one stage
•Specialisation by sex Type of specialisation in which certain occupations are exclusively either for males or females as dictated by custom, tradition, or law
•Specialisation by product Type of specialisation in which a producer concentrates on the production of a particular commodity
•Geographical or territorial specialisation Type of specialisation in which certain geographical region or territory specialises in the production of a particular commodity |
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Firm |
An independently administered business unit which is capable of carrying out production, construction or distribution activities |
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Characteristics of small and large firms |
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Money bed
Workers sitting on the money bed |
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Economies of scale |
The growth of a firm as a result of an increased level of production resulting in an increase in output and a decrease in the cost of production per unit of output |
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Types of economies of scale |
•Internal economies and internal diseconomies
Internal Economies: The advantage which a firm obtains as a result of its increase in size and expansion of its output
Internal diseconomies:
The disadvantages which a firm undergoes as a result of expansion, resulting in less efficiency and an increase in the cost per unit of output as a result of managerial problems
•External economies and external diseconomies
External economies
The benefits a firm derives from concentration or localisation of industries in a particular area
External diseconomies
The disadvantages a firm experiences when the activities of one or more industries increase the cost of production or output of that firm within the same location
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Basic Economic Problems |
The problems people encounter in society while attempting to satisfy their numerous wants with the limited resources available to them
Some basic economic problems include:
•what to produce •how to produce •for whom to produce •Efficient use of resources |
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Factors which determine what to produce |
•Consumers' needs
•Market demand
•Consumer income
•Cost of production
•Availability of resources
•Type of economy |
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Factors which determine how to produce |
•Technique of production
•Technological advancements
•Production function
•Relative cost of factors of production |
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Factors which determine for whom to produce |
•Satisfaction of wants
•Level of income
•Type of economic system |
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Efficiency of resource use + Factors which determine it |
The optimum use of the factors of production to achieve higher and better output at a reasonable cost
Factors
•Quality of labour
•Techniques of production
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Population |
The total number of people living within a geographical area at a particular time |
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Population Census: Definition and Types |
The head count of all the nationals of a country at a particular time
Types
•Defacto Population Census
Type of population census which involves the counting of only those who are physically present during the census
•De jure Population Census
Type of population census which involves the counting of people who are permanent residents of a specific area |
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Determinants of Population Size and Growth |
•Birth rate (Natality rate)
The rate at which children are born in a given area
•Death rate (Mortality rate)
The rate at which people die in a given area
•Migration
The movement of people from one geographical area to another |
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Factors affecting birth rate |
•Early marriages
•Desire for large families
•Religious beliefs
•Improved medical services
•Government aid
•Improved standard of living |
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Factors affecting death rate |
•Ratio of males to females
•Poor medical services
•High rate of infant mortality
•Poverty
•Natural disasters
•Man-made disasters |
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Migration: Types and Forms |
Types:
Emigration: Type of migration in which people leave their own countries
Immigration: Type of migration in which people enter another country
Forms:
•Rural-urban migration
The movement of people from rural areas to urban centres
•Rural-rural migration
The movement of people from one rural area to another rural area
•Urban-rural
The movement of people from urban centres to rural areas
•Urban-urban migration
The movement of people from one urban centre to another urban centre
•International migration The movement of people from one country to another
•Seasonal migration
The movement of people from one place to another during a particular season |
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Reasons for High Population Growth in West Africa (Factors that can affect the size of a country's population) |
•Increase in birth rate
•Decrease in death rate
•Type of marriage
•Religion
•Improved medical services
•Attidude towards family size
•Early marriage
•Illiteracy
•Absence of family planning
•Poverty
•Migration |
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Population Density |
The number of people per square kilometre of land
Population Density= Total Population/Land Area |
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Ageing Population or Declining Population |
A population with an increasing percentage of elderly people, while the relative percentage of children and workers are decreasing |
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Overpopulation: Definition and Control |
Defintion: A situation where a country has more people than its physical and human resources can support with adequate living standards
Control:
•Family Planning
•Discouragement of early marriage
•Increase in food supply
•Ecouragement of monogamy
•Limiting the size of towns
•Legislation of abortions
•Provision of gainful employment for women
•Stiffening of immigration laws
•Sex and Mass Education
•Encouragement of emigration |
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Underpopulation: Definition and Causes |
Defintion: A type of population that is less than the available resources of a country Causes: •A decrease in the birth rate
•An increase in the death rate
•A high level of emmigration |
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Optimum Population |
The type of population which when combined with available resources and the given level of existing technology secure a maximum return per head |
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Malthusian Population Theory: Features |
•Population was growing at a geometric progression while food supply was growing at an arithmetical progression
•There is a tendency for all living things to grow beyond the food available to them
•Unless population increase is matched with means of subsistence, negative and positive checks will come into force
•The checks can be wars, epidemics, and famine
•The population is essentially limited by the means of subsistence |
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Population Distribution or Structure: Defintion and Types |
The ways in which the population of a given country are distributed into certain categories e.g.
•Age Distribution
The seperation of the population of a country into age groups
•Sex Distribution
The classification of a given population according to sex or gender
•Occupational distribution
The classification of the working population into the different types of work they engage in
•Geographical distribution
The spread of people into separate geographical areas within a country |
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