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Microeconomics
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The study of the economic choices of a single entity e.g. one household, one business, one industry.
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Economics
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The study of how a society uses its limited resources to satisfy its unlimited wants.
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Limited Resources
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There aren't enough resources to make all the goods and service we need and want.
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Unlimited Wants
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Our wants are never ending.
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Macroeconomics
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The study of an economy as a whole.
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Good
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A tangible object or product we purchase to satisfy a need or want.
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Service
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An intangible product we pay someone else to provide for us.
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Need
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Something required for survival e.g. food, water, clothing, shelter
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Want
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Things we desire but are not necessary for survival.
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Factors of production
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Four types of resources used in the production of goods and services.
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Land resources
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Raw materials found naturally in our environment e.g. water, air, minerals, vegetation, animals, land.
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Labour resources
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Human skill and effort used to produce goods and services e.g. doctors, teachers, truck drivers.
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Capital resources
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Man-made objects that help produce other products e.g. sewing machines, buildings, computers.
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Enterprise resources
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Abilities and vision of entrepreneurs - people who form an idea for a good / service and organise its production.
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Economic Problem
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The problem of having unlimited needs and wants and only a limited quantity of resources to satisfy these.
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Scarcity
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Society has a limited quantity of resources and cannot produce all the goods and services people want.
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Opportunity Cost
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The next best alternative once we have made a choice.
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Consumer
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A person who purchases goods and services for personal use.
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Producer
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An organisation that produces and sells goods and services in an attempt to make a profit.
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Demand
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The quantity of a good or service that a consumer is both willing and able to buy at a particular price and time.
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Law of Demand
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As price rises, quantity demanded falls, and vice versa.