A LEVEL Economics

Backwards vertical integration a joining together into one firm of two or more firms where the purchaser merges with/takes over one or more of its suppliers Conglomerate integration a joining together into one firm of two or more firms producing unrelated products Demerger when a firm splits into two or more independent businesses Divorce of ownership from control when managers and directors of a business are different from the owners of a business (the shareholders) Forward vertical i...

GDP Gross domestic product measures the value of goods and services produced in an economy, it also measures national income/national expenditure Nominal GDP Measures the monetary value of GDP (this may include the effects of inflation) Real GDP Measures GDP adjusted for the effects of inflation, it measures the actual purchasing power of consumers in an economy GDP per capita Is the level of GDP divided by population The volume of goods and services Is the quantity produced The value...

Macroeconomics The study of the economy as a whole, including inflation, growth and unemployment. Aggregate demand The total of all demands or expenditures in the economy at any given price. Aggregate demand curve Shows the relationship between the price level and equilibrium national income. As the price level rises the equilibrium level of national income falls. Animal spirits Business confidence: the mood of managers and owners of firms about the future of their industry and the ...

What are the 4 factors of production? Capital, enterprise, land and labour What is the basic economic problem? How best to make decisions about the allocation of scarce resources among competing uses so as to maximise human happiness and welfare Economic goods Goods that have an opportunity cost in consumption as they use up scarce resources Free good Goods that don't have an opportunity cost in consumption as they don't use up scarce resources YED of a normal good Positive YED of...

Economics The study of the allocation of scarce resources. Economic Goods Resources that are scarce. Short Run A time period where at least one factor of production is fixed. Long Run A time period where all factors of production are variable. Productivity The output per unit of input. The Economic Problem Resources are scarce but wants are infinite. Scarcity The world's resources are limited, there are only limited amounts of land, water, oil, food, etc.. Therefore, resources are scar...

Normative statement an opinion that cannot be confirmed by referencing facts Positive statement a statement that can be proved by referencing facts Why are economic models used? theories cannot be tested in a controlled environment The basic economic problem scarcity - consumer wants are always greater than available resources Opportunity cost the next best alternative foregone Factors of production resources used by a firm in production List and define the factors of production labour...

Economic problem limited resources and unlimited wants marginal cost the increase in total cost that arises from an extra unit of production Ceteris parabus All this held consant Opportunity Cost The cost expressed in terms of the benefits of the next best thing forgone Positive statments Objective statements that can be backed with evidence Normative statements Subjective statements that cannot be backed with evidence Time periods Short run, Long run, Very-long run

Economics The study of the allocation of scarce resources. Economic Goods Resources that are scarce. Short Run A time period where at least one factor of production is fixed. Long Run A time period where all factors of production are variable. Productivity The output per unit of input. The Economic Problem Resources are scarce but wants are infinite.

Model A theoretical concept that looks at how differant variables interact. Ceteris Paribus All other factors remain the same. Positive Statement Objective, factually based comments that can be tested. Normative Statement Subjective, questionable comments based on valued judgements that are difficult to test. Scarcity When there are unlimited human wants but limited number of resources to meet these wants. Economic Problem Making choices on how to allocate scarce resources to best meet ...

itive Statement A statement that can be tested to see if it's correct or not Normative Statement A statement that has a value judgement and can't be refuted by looking at evidence Need Something necessary for human survival Want Something that is desirable Economic welfare The economic wellbeing of an individual or group of people (Human happiness) Capital good A good used in the production of other good and services Factors of production Land, Labour, Capital, Enterprise