1.1.3 The economic problem Flashcards
1
Q
What is resource scarcity the result of
A
- Infinite wants from consumers ( a never-ending wish list of goods and services)
- Finite resources
2
Q
What are resources categorised as
A
Land – any natural resource
Labour – any human input
Capital – any man made factor of production
Enterprise/Entrepreneur – the risk taker that organises the other factors of production
3
Q
What is the factor reward of land
A
Rent
4
Q
what is the factor reward of labour
A
wages
5
Q
what is the factor reward of enterprise
A
profit
6
Q
what is the factor reward of capital
A
interest
7
Q
The economic problem
A
finite resources + Infinite wants –> scarcity –> choice/allocation –> sacrifice–> opportunity cost
8
Q
what is scarcity
A
- a situation in which there are finite resources but infinite wants.
9
Q
A
