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IGCSEEONOMICS-GLOSSARY
1TheBasicEconomicProblem
Capital:goods/materialsthatareusedfortheproductionofotheritems.Notconsumedintheir
ownright.
Consumption:Usingupgoods/services.
ConsumerGoods:goodsthatarewantedbecausetheyprovidesatisfactiontotheirowner.
DemeritGoods:goodsthatareperceivedtohaveanegativeimpact/effecton
society/individuals.
EconomicRent:
Economy:Totalvalueofgoodsservicesproducededwithinacountry.
Enterprise:risktakingdecisionmakinginbusiness
E:
FactorsofProduction:land,labour,capital,enterprise.
FixedCapital:capitalgoodsthatdonotneedreplacingintheshortterm(machinery,tools,
buildings).
FreeGoods:goodsthatrequirenoresourcestomake(wind,sunshine).
Goods:itemsproducedbythefactorsofproduction(usuallyforeconomicgain).
Labour:thehumaneffort(mentalphysical)requiredtoproducesomething.
Land:thelandweuse/buildonresourcesthatarecontainedinthelandandwater.
Markets:Placewheregoodsservicesareed-(maybevisibleorinvisible).
MeritGoods:goodsthatareperceivedtoprovidepositiveexternalities(beneficialtosociety)
Needs:requirementsforexistence(food,cleanwater,shelter)
OpportunityCost:thecostofthenextbestalternative.
ProductionPossibilityCurve:acurvethatrepresentspossibleoutputifthefactorsof
productionareusedefficiently.Alsoknownastheopportunitycostcurveasitcanbeusedto
showtheopportunitycostofproducingdifferentproducts/quantities).
PublicGoods:goodprovidedbythegovernment(paidforthroughtaxes)thateverybody
benefitsfrom(streetlighting).
Resources:itemsthatareneeded/usefulforconsumptionortheproductionofotheritems.
Scarcity:limitedavailabilityofresources(onesthatwillrunouteventually),notenoughto
satis
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