They are indirect taxes levied on our spending on goods and services such as cigarettes, fuel and alcohol. There are also duties on air travel, car insurance.

The number of people living below a certain income threshold or the number of households unable to afford certain basic goods and services. The united nations definition is a servere and persistent deprivation of basic human needs.

A per passenger charge on air travel from UK airports. The level of duty varies depending on the class of travel (with economy class having a smaller charge) and the distance travelled.

Excise duties on alcohol are a form of indirect tax and are chargeable on beer, wine and spirits according to their volume and/ or alcoholic content.

It occurs when the value that consumers palce on a good or service (reflected in the price they are willing and able to pay) equals the cost of the resources used up in production.

Occurs when somebody knows more than somebody else in the market. It can make it difficult for the two people to do business together. A situation in which some agents have more information than others and this affects the outside of a bargain between them.

A production technique that uses capital machinery/ technology to replace or enhance human labour.

Is the total cost divided by the number of units of the commodity produced.

Are costs of production which are are constant whatever the level of output. Average fixed costs are total fixed costs divided by the number of units of output, that is, fixed cost per unit of output.

Factors which make it difficult or expensive for new firms to enter a market in order to compete with existinf suppliers. Examples include the effect of patents; brand loyality among consumers; the high costs of buying capital equipment and also the need to win licences to operate in certain markets.

Is that there are infinite wants but finite (non- renewable) resources with which to satisfy them

An illigal market in which the market price is higher than a legally imposed price ceiling. They can develop where there is excess demand (or shortage) for a commodity.

A distinctive product offering which is created by the use of a logo, symbol, name, design, packaging or combination. The key in designing and building it, is to differentiate if from competitors.

The purchase by one organisation of large quantities of a product or raw material, which often results in a lower price because of their market power and because it is cheaper to deal with one customer and the deliveries can be on a larger scale.

A market that favours buyers because supply is plentiful relative to demand and therefore prices are relatively low. The opposite of a seller's market.

A good or service that is produced as a consequence of producing another good or service.

The extent to which a business is making full use of existing factor resources

Effort to develop human skills or infrastructures within a community or organisation. Producer or capital goods such as plant (factories) and machinery and equipment are useful not in themselves but for the goods and services they can help produce in the future.

Distinguished from "financial capital", meaning funds which are available to finance the production or acquisition of real capital

A production technique which uses a high proportion of capital to labour

An economic system organised along capitalist lines uses market-determined prices to guide our choices about the production and distribution of goods. One key role for the state is to maintain the rule of law and protect private property.

A formal agreement among firms. The members may agree on prices, total industry output, market share, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies, and the division of profit or combination of these. They are illegal under UK and European competition laws.

To simplify analysis, economists isolate the relationship between two variables by assuming ceteris paribus - all other influencing factors are held constant.

Cigarettes in the UK are taxed on 16.5% retail price + 15.95 pounds per thousand cigarettes

It is any eyplicit or implicit agreement between suppliers in a market to avoid competition. The main aim of this is to reduce market uncertainty and achieve a level of joint profits similar to that which might be achieved by a pure monopolist.

Government policy directed at encouraging competition in the private sector: e.g the investigation of takeovers or restrictive practices.

A market where no single firm has a dominant position and where the consumer has plenty of choices when buying goods or services. There are few barriers to the entry of new firms.

Goods in competitive supply are alternative products a firm could make with its resources. E.g. a farmer can plant potatoes or carrots. An electronics factory can produce VCRs or DVDs.

Two of them are said to be in joint demand. Examples include: fish and chips, DVD players and DVDs, iron ore and steel.

It exists when the economic system allows scarce resources to be allocated to producing goods and services that reflect the wishes of consumers. Sovereignty can be distorted by the effects of persuasive advertising.

The act of using goods and services to satisfy wants. This will normally involve purchasing the goods and services.

Market with no entry barriers - firms can enter or leave an without significant cost

Costs faced by a business when producing a good or service for a market. Every business faces costs - these must be recouped if a business is to make a profit from its activities. In the short run a firm will have fixed and variable costs of production.

Demand that change in a regular way over time depending on the part of the trade cycle that a country is in or the time of year.

Quantitiy of a good or service that consumers are willing and able to buy at a given price in a given time period.

It shows the relationship between the price of an item and the quantity demanded over a period of time. For normal goods, more of a product will be demanded as the price falls.

The consumption of those goods can lead to negative externalities which cause a fall in social welfare. Consumers may be unaware of the negative externalitites that theses goods create - they have imperfect information.

The demand for a product X might be strongly linked to the demand for a related product Y - giving rise to the idea of a derived demand.

Income that remains after direct taxes and government charges has been paid

The reduction of risk achieved by replacing a single risk with a larger number of smaller unrelated risks

The specialisation of labour in specific tasks, intended to increse productivity

A reduction in an organisation's workforce

It is about making the best use of our scarce resources among competing ends so that economic and social welfare is maximised over time

An increase in the productive potential of the country - shown by an outward shit of the production possibility frontier. It is measured in two main ways - as an increase in real GDP or as an increase in potential GDP

Government policies aimed at influencing trends in the economy

Reductions in long-run average cost from an increase in the scale of production