GCSE - Introduction to Economics


Keywords from the Economics GCSE course
James Dodd
Flashcards by James Dodd, updated more than 1 year ago
James Dodd
Created by James Dodd about 8 years ago

Resource summary

Question Answer
Resources Things that are needed in order to satisfy wants, e.g. money, time, staff or land
Scarce Resources A situation where there aren't enough resources for everyone to get what they want all of the time
Means of exchange A method for allowing transactions to take place, e.g. money or (years ago) gold
Satisfaction The enjoyment received when consuming a product or service (or resource)
Value The worth of soemthing represented by the amount of money we are prepared to pay for it
Choices Decisions that need to be made as a result of having scarce resources
Oppurtunity Cost The value of the next best alternative that has been given up
Trade-off The item we have to give up in order to get something else
Price sensitivity How much the demand changes according to a change in the price. Price sensitivity depends on numerous factors, most notably the number, price and availibilty of substitutes
Substitute A rival product that a consumer can switch to if the price of a product changes
Revenue The money earned from selling products and services. It is calculated by multiplying the selling price by the quantity sold.
Conflict of interest Where different groups of stakeholders each have a different perspective on an issue
Power and influence of a stakeholder Some stakeholder are more influential in the decision-making of a business
Stakeholder An individual, group or organisation that is interested in the actions and success of a business
Negative Externality A cost inflicted on other stakeholders when an individual or business makes a choice
Positive Externalities A benefit shared by other stakeholders when an individual or business makes a choice
Market Share A company's sales as a percentage of the entire sales in a particular market
Profit What revenue is left after costs have been paid
Competitive advantage Any factor that helps a business succeed when fighting against a direct rival
Cash The money the firm holds in notes and coins and in its bank account
Cash Flow The movement of money into and out of the firm's bank account
Changing demand Businesses have to adapt their plans depending on whether demand is increasing or decreasing
Economic growth The rate at which demand is changing in the economy
Consumer Price Index A percentage figure that shows how much prices are increasing per year
Cost of living When prices are rising people describe the cost of living as increasing
Inflation An increase in the general price level of prices in an economy
Claimant count The measure of unemployment used by the UK government. It counts the number of people claiming Job Seekers Allowance to estimate the number unemployed
Unemployment The number of people out of work and actively seeking work
Shock An unexpected event that affects the economy in terms of availability and price of resources or products
Currency The unit of money in a particular country or region
Exchange rate The price of one currency in terms of another
Bank of England The instituion responsible for setting the interest rate on a monthly basis
Interest Rate The percentage that shows how expensive it is to borrow money and how beneficial it is to save it
Government Spending Money spent by the government to provide essential services that profit-driven businesses would not
Taxation Money raised by the government from taking a share of income, spending and profits
External growth An increase in business size as a result of a merger or takeover
Internal growth An increase in the business size as a result of the business's own actions or decisions
Merger Where two businesses agree to join forces and begin trading as one
Takeover Where one business purchases another and incorporates it into its own operations
Economies of scale When a business benefits from its growth
Diseconomies of scale When a business suffers as a result of business growth
Specialisation Focusing on one job role, making it easier to become steadily more expert
Collusion Where several firms act together to effectively become a monopoly
Monopoly Where a single supplier dominates the sales in a market and therfore has a degree of control over it
Natural monopoly Where market conditions mean that it is in everyone's best interest for a business to be in a monopoly position
Competition Comission A UK and EU government organisation that prevents businesses taking advantage of their market position
Government regulation Where the Government uses laws and punishments to influence how the businesses behave
Self-regulation Where companies voluntarily agree to create and follow their own code of conduct
Corporate Social Responsibility (CSR) A policy to convince stakeholders in a business that its actions are in the best interests of society, not just those of its shareholders
Pressure groups An organisation set up to influence businesses and government to protect stakeholders
Economic Growth Occurs when gross domestic product increases from one period of time to another. It is shown as a percentage change
Gross Domestic Product (GDP) The measure of the value of goods and services produced in an economy over a period of time
Standard of living How economists look at an indivdual's share of the national income
GDP per capita The amount of income the country has overall, divided by its population to give the income per person
Human Development Index (HDI) The United Nations' measure of standard of living it includes GDP per capita as well as education and health care
Distribtion of income How the national income is shared among the population. It can reveal if very few take the majority of the income or if it is shared equally
Renewable resources Resources that are recreated by the environment at least as fast as they are consumed
Sustainable growth A level of economic growth that meets the needs of current generations while preserving the environment so future generations can meet their needs
Basic responsibilities Measures put in place by the Government to prevent businesses damaging the environment and exploiting stakeholders
Governmenent Intervention When the Government uses taxation, subsidies or regulation to influence how businesses behave
Regulation When the Government uses laws and punishments to influence how busineeses behave
Subsidy Money provided by the Government as an incentive to individuals or businesses to act in a certain way
Taxation Money raised by the Government by taking a slice of the income and spending of households and businesses
Absolute poverty Where individuals cannot afford things required for an adequate standard of living
Inequality A word to describe the fact that there is relative poverty in a country or area
Poverty threshold The minimum level of income necessary to achieve an adequate standard of living
Relative poverty Where individuals cannot afford things considered part of normal life in their society
Exporting Selling products produced in one country to customers in another country
Importing Buying products produced in another country
Less Economically Developed Country (LEDC) A country that has a relatively low standard of living and lacks the capactity to prodcue manufactured goods
Trade When economies begin to benefit from exchanging goods with each other
Free Trade There are no barriers to trade between two economies
Protectionism Using trade barriers to shield companies in your econmy from international competition
Quota A limit on the number of goods that can be imported
Trade subsidy A handout given to home producers to make imported goods uncompetitive
Tariff A tax on the import of goods
Trade barrier A measure used by one country to make it less attractive to import goods from other countries
European Union (EU) Europe's single market, a trade bloc which allows free trade between all members
Single currency A way to improve the effectiveness of a single market by removing the trade barrier of currency exchange
Single market A group of economies that agree to act as one larger economy with no restriction on trade between the members
Multinational An organistaion that has facilities (offices, factories, etc) in sevreal countries
International Government Organisations that try to coordinate the effects of indivdual governments
Charities Organistaions comitted to raising awareness and money for a cause such as world poverty
Non-Government Organisations (NGO) Not-for-profit organisations that are separate from government and set up to promote the interests of the poor (and the environment) and relive their suffering
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