Term
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Definition
| The difference between what consumers are willing to pay for a good or service and the market price. |
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Term
| Cross price elasticity of demand (XED) |
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Definition
| Measures the responsiveness of the quantity demanded on one good when the price of another good changes. |
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Term
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Definition
| Specialisation of workers into performing a narrow range of tasks. They concentrate on one small section of the task,repeating it. |
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Term
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Definition
| Where the competitive interaction of many producers and consumers, without the intervention of a government, provides the forces of supply and demand to allocate resources through the price mechanism. |
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Term
| Income elasticity of demand (YED) |
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Definition
| Measures the responsiveness of the quantity demanded of a good to a change in real income. |
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Term
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Definition
| When real income increases, demand falls. A negative income elasticity of demand. |
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Term
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Definition
| A combination of free markets and government intervention to allocate resources. |
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Term
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Definition
| Resources that which once exploited cannot be replaced, for example coal, oil, gold and copper. |
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Term
| Non-sustainable resources |
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Definition
| Resources that are being economically exploited in such a way that it is being reduced over time. For example oil. |
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Term
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Definition
| When real income increases, demand also increases. A positive income elasticity of demand. |
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Term
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Definition
| They are value-judgements. They have a subjective meaning so cannot be proved or disproved. Often contain words such as ought/should/I think. |
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Term
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Definition
| The cost of a choice measured in terms of the next best alternative foregone. |
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Term
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Definition
| This is a factual statement. It can be proved or disproved. |
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Term
| Price elasticity of demand (PED) |
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Definition
| Measures the responsiveness of quantity demanded to a change in price. |
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Term
| Price elasticity of supply (PES) |
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Definition
| Measures the responsiveness of quantity supplied to a change in price. |
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Term
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Definition
| The difference between what producers are willing and able to supply a good for and the market price. |
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Term
| Production possibility frontier |
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Definition
| The different combinations of economic goods that an economy can produce if all resources in an economy are fully and efficiently employed. |
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Term
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Definition
| These can be exploited over and over again because they have the potential to renew themselves. For example, fish stocks and wood. |
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Term
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Definition
| This is the fundamental economic problem. Society's economic resources (factor inputs) are insufficient to meet the unlimited needs and wants of the population. The existence of scarcity implies that choices have to be made about how resources are to be allocated within the economy. |
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