1.1.3: The Economic Problem Flashcards
What are non-renewable resources?
Resources that are finite. Once they are used, they can’t be replaced (e.g. coal, fuel, oil).
What are renewable resources?
Resources that can be replenished (e.g. wind, wood, water).
What is opportunity cost?
The benefit that is lost from taking an alternative (e.g. funding the military at the cost of healthcare).
What is the importance of opportunity cost?
Decision making on the best use of time, money and resources.
What is the economic problem?
Resources are scarce but wants are infinite.
What are 8 ways to ration scarce resources?
-By market price.
-By consumer income.
-By assessment of need.
-By household postcode.
-By education level.
-By age.
-By gender.
What are the 4 factors of production?
Land, labour, capital, enterprise.
What is land?
Natural resources used in production.
What is labour?
The work done by labourers.
What is capital?
Equipment used in production.
What is enterprise?
Willingness to take risks for a profit.
What are free goods?
Resources which are not scarce.
What are economic goods?
Recourses which are scarce.
What are producers?
Firms or people that make goods or services. 
What are consumers?
Firms or people who buy the goods and services. 
