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TERMsCONCEPT BANK For Economics PDF
TERMsCONCEPT BANK For Economics PDF
3. Budget - An annual procedure to decide 1. Scarcity - our wants and needs are virtually
how much public spending there should be unlimited, but our resources to satisfy those
in the year ahead and what mix of taxation, desires are limited. Thus, we must choose
charging for services and borrowing should which desires to satisfy. To use resources
finance it. sustainably, our goal is to use them
effectively and efficiently. This means that
4. Bull - An investor who expects the price of we want to achieve our goal while
a particular security to rise; the opposite of a minimizing the amount of resources needed
bear. to achieve our goal. For example, if you
want to bake a cake, your ingredients will
5. Buyer's market - A market in which supply have been used effectively if you finish with
seems plentiful and prices seem low; the a cake and not a disastrous mess in the oven.
opposite of a seller's market. If you bake the cake correctly on your first
try, then you'll have used your ingredients
6. Cannibalise - Eating people is wrong. efficiently since nothing was wasted.
Eating your own business may not be.
FIRMS used to be reluctant to launch new 2. Opportunity Cost - This concept goes hand
products and SERVICES that competed in hand with scarcity. Commonly known as
with what they were already doing, as the the basic relationship between scarcity and
new thing would eat into (cannibalise) their choice, opportunity cost is a benefit
existing business. In today's innovative, someone gives up in order to gain something
technology-intensive economy, however, a else. For example, if you have $10 to spend
willingness to cannibalise is more often seen but you must choose between spending it on
as a good thing. This is because food and spending it on a book, you must
INNOVATION often takes the form of what give up one to attain the other. The
opportunity cost of buying food is the book,
since you no longer reap the benefits of
owning the book. On the contrary, the
opportunity cost of purchasing the book
would be your inability to satisfy your
hunger.