National 5 Economics Guaranteed Success

National 5 Economics Guaranteed Success Scarcity ️️Scarcity is the basic economic problem. It occurs because we have unlimited wants for goods and services, due to greed. However we have limited resources. Resources are the factors of production. Opportunity Cost ️️A sacrifice made for the next best alternative. Economic Efficiency ️️Producing goods and services that people most want, at a minimal cost. Demand ️️Being willing and able to buy a good or service at a particular price. Total Utililty ️️Total satisfaction from consuming all units of a good or service. Marginal Utility ️️The extra satisfaction gained from consuming one more unit of a good or service. Diminishing Marginal Utility ️️A decline in the extra satisfaction we get from consuming extra units of a good or service. Supply ️️Being willing and able to provide a good or service at a particular price. Market ️️It's wear buyers and sellers come together to agree a price and exchange. Disposable Income ️️Money left over after deductions such as income tax. Exchange Rate ️️The price of one currency in terms of another. Cyclical Unemployment ️️When a firm has a low economic output and varies with the business cycle they let people go. Frictional Unemployment ️️When people move jobs. Technological Unemployment ️️When there are changes in the work due to technological advances and so technology is chosen over people. Structural Unemployment ️️When the company moves abroad. Direct Taxation ️️Taxes which are taken from individuals and firms and payed straight to the government. Indirect Taxation ️️Taxes payed through an intermediary to the tax authorities. Progressive Taxation ️️When the proportion of taxation rises as income increases. Regressive Taxation ️️When the proportion of taxation falls as income increases. Trade Deficit ️️Value of imports greater than the value of exports. Trade Surplus ️️Value of exports greater than the value of imports. Real Growth ️️Takes into account inflation. Recession ️️2 consecutive quarters of negative economic growth. Demand Pull ️️When demand in the economy increases and firms reach capacity the prices are bid up. Cost Push ️️When the price of the input increases, firms will increase prices to maintain a profit margin. Monetary Inflation ️️When the money supply of the economy grows. Consumers spend more money, this will drive up demand and hence the prices. Unemployment ️️Able, available and willing to work but cannot obtain a job. Rate of Unemployment ️️The proportion of the labour force not working. Level of Unemployment ️️Number of people not employed. Claimant Count ️️Based on administrative records of people claiming unemployment benefits. Labour Force Survey ️️A survey sent to around 150,000 people, asking about their personal circumstances and their position in the Labour Market. Seasonal Unemployment ️️When a job can only be obtained during certain seasons. Discretionary Income ️️Money left over after deducting all expenses from income. Fixed Cost ️️A cost which does not change with and increase or decrease in output. Variable Cost ️️A cost which does change with an increase or decrease in output. Long Run ️️All factors of production are variable. This means all costs are variable. Short Run ️️A period of time where at least one factor of production is fixed. Revenue ️️Money made from selling a good or service. National Income ️️Value of goods and services produced in an economy in a year. Economic Growth ️️Increase in the production capacity of the economy. Nominal Growth ️️Money value of output. Free Market ️️Based on consumers demand. Using firms resources so that we can get maximum output for minimum input at the lowest cost. For those who can afford it. Command Economy ️️Government decide what is produced. Government give produces quotas. Everyone gets to buy. Income Effect ️️The price of a good rises. Consumers real income falls. Fall in purchasing power. Buy less of a good. Substitution Effect ️️A price of a good rises. Consumers look to switch to similar products. Buy less of a good. Demand Factors P ️️Population Demand Factors A ️️Advertising Demand Factors S ️️Substitution Demand Factors I ️️Income Demand Factors F ️️Fashion & Trends Demand Factors IR ️️Interest Rate Demand Factors C ️️Complementary Goods