Economic and Business Studies KEY WORDS Flashcards


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1

Opportunity cost

The value of the next best alternative forgone

2

Production possibility curve

A graph to show the maximum that can be produced from two products and opportunity cost is the slope

3

Occupationally moblie

Capable of changing use

4

Geographically immobile

Incapable of moving from one location to another location

5

Occupational mobility

The ability of factors of production to move from one use to anther

6

Geographical mobility

The ability of factors of production to move from one area to anther

7

Scarcity

A situation where there is not enough to satisfy everyone’s wants

8

The economic problem

Unlimited wants exceed scarce resources

9

Factors of production

The economic resources of capital, enterprise, labour, and land

10

Land

Gifts of nature available for production

11

Labour

All human effort mental and physical involved in producing goods and services

12

Capital

Human made goods used in production

13

Enterprise

Risk bearing and decision making in business

14

Investment

Spending on capital goods

15

Depreciation

The value of replacing capital

16

Productivity

Output per worker hour

17

Economic good

A product which requires resources to produce it and therefore has an opportunity cost

18

Free good

A product which does not require resources to produce it and therefore has no opportunity cost

19

A planned economy

An economy where the government makes the crucial decisions, land and capital are state-owned and resources are allocated by directives

20

A market economy

An economy where consumers determine what is produced, resources are allocated by the price mechanism and land and capital are privately owned

21

A mix economy

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