Microeconomics September Test 3.0 / 5 based on 1 rating ? Business Studies & EconomicsMicroeconomicsASOCR Created by: SimoneCreated on: 29-09-13 18:38 Economics studies how individuals, firms and governments make choices on allocating scarce resources to satisfy their unlimited want 1 of 15 The Economic Problem asserts that there is scarcity, or the finite resources available are insufficient to satisfy all human wants 2 of 15 Factors of Production the inputs used in the production process of goods/services 3 of 15 Factor Incomes/Rewards What you get in return for the use of your resource e.g. rent 4 of 15 PPC shows the maximum combination of two goods in a time period given all resources are fully and efficiently used 5 of 15 Money anything generally accepted my means of payment for the delivery of goods or for the settlement of debt 6 of 15 Functions of money: used as a medium of exchange, a unit of account and a store of value 7 of 15 Characteristics Portable, Acceptable, Divisible, Durable, Limited, Extremely hard to forge, Recognisable 8 of 15 Exchange process whereby goods or services are traded 9 of 15 Specialisation the concentration or workers, firms or economies on a narrow range of goods/services 10 of 15 Division of Labour the production process is divided into individual operations each performed by specialised workers 11 of 15 Opportunity Cost sacrifice, the cost of the next best alternative forgone 12 of 15 Market Economy this economic systems allocates resources through the market factors of supply and demand 13 of 15 Consumer Goods bought by individuals - durable or non-durable 14 of 15 Capital Goods bought by businesses to be used in the production of other goods 15 of 15
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