| A | B |
|---|
| Barter economy | An economy where people exchange goods and services directly with one another without any payment of money. Workers would be paid with bundles of goods. |
| Capital | All inputs into production that have themselves been produced: e.g. factories |
| Consumption | The act of using goods and services to satisfy wants. This will normally involve purchasing the goods and services. |
| Factors of Production | (Resources)The inputs into the production of goods and services: labour |
| Good | A tangible product. Something that you could physically touch: e.g. a car. |
| Increasing opportunity costs | With additional production of one good involves ever-increasing sacrifices of another. |
| Investment | The production of items that are not for immediate consumption. |
| Labour | All forms of human input |
| Land | (Raw materials)Inputs into production that are provided by nature: e.g. unimproved land and mineral deposits in the ground. |
| Macroeconomics | The branch of economics that studies aspects of the whole economy: e.g. employment |
| Marginal benefits | The additional benefits of doing a little bit more (or 1 unit more if a unit can be measured) of an activity. |
| Marginal costs | The additional costs of doing a little bit more (or 1 unit more if a unit can be measured) of an activity. |
| Market | The interaction between buyers and sellers. |
| Microeconomics | The branch of economics that studies individual units: e.g. households |
| Opportunity cost | The cost of any activity measured in terms of the best alternative forgone. |
| Product | A good or a service. |
| Production | The transformation of inputs into outputs by firms in order to earn profit (or meet some other objective). |
| Production possibility curve | A curve showing all the possible combinations of two goods that a country can produce within a specified time period with all its resources fully and efficiently employed. |
| Rational choices | Choices that involve weighing up the benefit of any activity against its opportunity cost. |
| Scarcity | The excess of human wants over what can actually be produced to fulfil these wants. |
| Service | An intangible product. A product that you cannot physically hold: e.g. travel |
| Wants | The desire to obtain goods and services. This desire is unlimited. |
