1371207
Description
Flashcards by Jack Sharp, updated more than 1 year ago
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Created by Jack Sharp
about 10 years ago
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| Question | Answer |
| SCARCITY | Resources are limited in supply, e.g. raw materials, time. |
| SATISFACTION | The enjoyment received when consuming a product or service (or resources). |
| OPPORTUNITY COST | The next best alternative that wasn’t chosen. This should be given a £ value so it can be compared to the possibility that was chosen. |
| TRADE - OFF | where the selection of one choice results in the loss of another |
| REVENUE | The money earned from selling products and services. It is calculated by multiplying the selling price by the quantity sold. |
| PRICE SENSITIVITY | How people will respond to a change in price. This is mainly determined by the number of alternatives people have. If demand is price sensitive then firms should choose a low cost strategy as the revenue gained is higher than the revenue lost. |
| SUBSTITUTE | Something that is an alternative for something. |
| NECESSITY | A good or service that a consumer views as essential. |
| DIVIDENDS | The payment made to shareholders from the profits of a company. |
| CONFLICT OF INTEREST | Where different groups of stakeholders each have a different perspective on an issue eg pressure groups and shareholders |
| EXTERNALITIES | The side-effects of a decision on other people outside of the decision making process. These effects could be positive eg jobs or negative eg pollution. |
| NEGATIVE EXTERNALITIES | These are costs that other people face due to the decisions of others that they aren’t compensated for eg pollution and ill health. These are often unintentional |
| POSITIVE EXTERNALITIES | These are benefits that people receive as a result of other’s decision that they have not paid for eg improved infrastructure and jobs. These are also often unintentional |
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