3.1.3 - Economic Resources Flashcards
What is production?
The conversion of inputs into outputs
What is a capital good?
A good that is used in the production of other services.
What is a consumer good?
A good that is consumed by individuals to satisfy wants and/or needs.
What is an “easy” way to improve economic welfare?
Increasing consumption of material goods.
What are the four factors of production?
Land, labour, capital and enterprise.
Why is enterprise different from the other factors of production?
They address issues by deciding what to produce, how to produce it and for whom to produce it.
Is enterprise included in command economies?
No. The central state decides what to produce, how to produce it and for whom to produce it.
What is entrepreneurial profit?
The profit remaining after the cost of employing the other factors of production.
Why do entrepreneurs do what they do?
In a free-market economy, there is a price incentive to generate more money, this leads to risk taking on behalf of entrepreneurs to generate more income to increase the price incentive.
Can finite resources be recycled?
In theory, however, it is often not economically viable to recycle more than a tiny fraction.
