Key Economic Terms – Unit 1 Quizs

factors of production

• Resources or inputs available in an economy that are used in the production of goods and services.

• Only labor and capital used in manufacturing processes.

• Natural resources that are not renewable.

• Financial capital that is invested in stock markets.

excludability

• Where it is possible to stop someone from consuming a good or service.

• A situation where everyone can access a resource freely.

• The ability to restrict access to a good or service based on payment.

• A characteristic of public goods that allows unlimited access.

quasi-public good

• Good that has some but not the full characteristics of a public good.

• A good that is entirely non-excludable and non-rivalrous.

• A good that is provided exclusively by the private sector.

• A good that is only available to those who can afford it.

choice

• Resources are abundant, so individuals, firms, and governments have no need to consider alternatives.

• Resources are scarce, so individuals, firms, and governments have to consider alternatives.

• Resources are unlimited, allowing individuals, firms, and governments to pursue any option they want.

• Resources are evenly distributed, making alternatives unnecessary.

labour

• A factor of production – human resources available in an economy.

• A type of capital used in manufacturing.

• A measure of the economic output of a country.

• A government policy to regulate employment.

low-income countries

• Economies where income per head was $1025 or less in 2018 (World Bank).

• Countries with a GDP growth rate of over 5% annually.

• Nations with a high standard of living and low poverty rates.

• Regions where the average income exceeds $5000 per year.

market economy

• An economic system where most decisions are taken through the market mechanism.

• A system where the government makes all economic decisions.

• An economy that relies solely on barter and trade.

• A type of economy that is completely controlled by private corporations.

high-income economies

• Countries with a high standard of living and high GDP per capita

• Countries with low levels of industrialization

• Countries primarily based on agriculture

• Countries with high unemployment rates

trade-off

• A decision to give up one good for another good.

• A method of increasing production efficiency.

• A strategy for maximizing profits in business.

• A process of negotiating prices in a market.

specialisation

• The process of producing a variety of goods and services.

• The process by which individuals, firms, and economies concentrate on producing those goods and services where they have an advantage over others.

• The method of increasing the workforce in a company.

• The strategy of reducing costs by outsourcing production.