Basic Economic Problem Flashcards
what is the basic economic problem
resources must be allocated between competing uses because wants are infinite whilst resources are scarce
capital
(as a FOP) is the stock of manufactured resources used in the production of goods and services
choice
the alternative uses of scarce resources
economic goods
goods that have an opportunity cost and therefore are scarce
entrepreneurs
individuals who seek out profitable opportunities for production and take risks in attempting to exploit these
factors of production
land, labour, capital, enterprise
fixed capital
economic resources such as factories which transform working capital into goods and services
free goods
goods with no opportunity costs and unlimited
human capital
the value of the productive potential of an individual or workforce
labour
workforce
land
all natural resources
non sustainable resources
a resource which can be economically exploited in such a way that the stock is being reduced over time
opportunity cost
the benefits forgone of the next best alternative
sustainable resource
a resource which is being economically exploited in such a way that it will not diminish or run out
working/circulated capital
resources in production waiting to be transformed into goods
