1. 4. human resources available in an economy;
  2. 5. selection; where information failure results in someone who is unsuitable obtaining insurance;
  3. 7. good; one that has adverse side eff ects when consumed;
  4. 9. the creation of capital goods;
  5. 14. economy; one where market forces and government, private and public sectors are involved in resource allocation decisions;
  6. 17. a situation where society knows best and has some right to make a value judgement;
  7. 19. system; the means by which choices are made in an economy;
  8. 21. natural resources in an economy
  9. 23. of resources; where resources are deliberately moved from one product to another;
  10. 25. mobility; the ease by which factors of production can be moved around;
  11. 27. needs that are not always realised;
  12. 29. mechanism; where decisions on price and quantity are made on the basis of demand and supply alone;
  13. 30. the process of creating goods and services in an economy;
  14. 32. debt obligations;
  15. 34. good; goods that have some but not all of the characteristics of public goods;
  16. 35. as more consume, the benefit to those already consuming is not diminished;
  17. 36. a man-made aid to production;
  18. 41. of labour; where a manufacturing process is split into a sequence of individual tasks;
  19. 42. of production; anything that is useful in the production of goods and services;
  20. 43. hazard; the tendency for people who are insured or otherwise protected to take greater risks;
  21. 45. organises production and is willing to take risks;
  22. 46. anything that is generally acceptable as a means of payment;
  23. 47. a situation in which wants and needs are in excess of the resources available;
  24. 48. growth; represented by a shift outwards of the production possibility curve;
  1. 1. inputs available for the production of goods and services;
  2. 2. economy; one that has a low income per head;
  3. 3. possibility curve; a simple representation of the maximum level of output that an economy can achieve when using its existing resources in full;
  4. 6. where buyers and sellers get together to trade
  5. 8. where it is possible to exclude one from consumption;
  6. 10. rider; someone who does not pay to use a public good;
  7. 11. the extent to which there is an adequate supply of assets that can be turned into cash;
  8. 12. consumption; the capital required to replace that which is worn out;
  9. 13. the process by which individuals, firms and economies concentrate on producing those goods and services where they have an advantage over others;
  10. 15. where consumption by one person reduces availability for others;
  11. 16. or planned economy; one where resource allocation decisions are taken by a central body;
  12. 17. statement; one that is based on empirical or actual evidence;
  13. 18. statement; one that is subjective about what should happen;
  14. 20. the process by which consumers satisfy their wants;
  15. 22. where it is not possible to stop all benefiting from consumption;
  16. 24. structure; the way in which an economy is organised in terms of sectors;
  17. 26. economy; one where most decisions are taken through market forces;
  18. 28. good; one that is non-excludable and non-rival and for which it is usually diff icult to charge a direct price;
  19. 31. cost; the cost expressed in terms of the best alternative that is forgone;
  20. 33. failure; where people do not have full or complete information;
  21. 35. money; non-cash assets that can be quickly turned into cash;
  22. 37. goods; consumed by someone and not available to anyone else;
  23. 38. run; time period when all factors of production are variable;
  24. 39. underpins the concept that resources are scare so choices have to be made by consumers, firms and governments;
  25. 40. run; time period when a firm can only change some and not all factor inputs;
  26. 44. long run; time period when all key inputs into production are variable;
  27. 46. good; one that has positive side eff ects when consumed;