Terminology- Term 1

• Economy: An area in which people manufacture or produce goods and services.
• Economics: A social science that studies the daily choices people make and how to satisfy their unlimited needs and wants with the limited means at their disposal in such a way that they achieve the maximum satisfaction.
• Resources: Things that can be used to achieve a certain goal, such as money that can be used to buy products.
• Needs: Goods and services the individual cannot do without.
• Wants: Goods and services the individual can do without.
• Factors of Production: Land, Labour, Capital and Entrepreneurship.
• Traditional Economy: The hierarchy within the society determines the allocation of the product, for example, the food gathered is divided according to tradition and seniority within the tribe.
• Command economy: The authorities decide on the production and distribution of the products, resources are used and distributed according to the government plan.
• Market economy: Private ownership and individual preferences are important in this type of economy, the marketplace and individuals’ choice determine the production of products.
• Mixed economy: There is a combination of the market and command economy, where private ownership and individual choices are important and where government also has a say in how resources are used and distributed.
• Monetary economics: This policy is the study of how money and the banking industry is controlled and regulated in a country.
• International economics: This policy is the study of international trade and finance and why most countries need to import and export products.
• Public Sector economics: This policy deals with the decisions and policies made by a country’s government.
• Developmental economics: This policy is the strategies and policies that help countries to develop and grow.
• Labour economics: This policy deals with the demand and supply of labour within an economy.
• Environmental economics: This policy pays attention to environmental issues on the society and its impact on the society.
• Regional economics: This policy refers to the study of specific geographical regions in a country which is responsible for the production of certain goods and services.
• Microeconomics: The individual’s demand for a certain product at a certain price.
• Macroeconomics: The study of the total consumption, production, and exchange of individuals, households and industries in a country.
• Positive statement: A fact that can be proved or disproved.
• Normative Statement: An opinion or value judgement.
• Model: It can be used to explain theories and make predictions.
• Ceteris paribus: A Latin term that means “with all other factors or things remaining the same”.