Business + the economy Flashcards
1
Q
Economics
A
The study of a group or individual about the decisions they make about limited resources to satisfy our unlimited needs + wants.
2
Q
Basic economic problem
A
Relative scarcity
3
Q
Relative scarcity
A
- The economic problem
- Resources are limited but wants are unliited.
4
Q
Opportunity cost
A
- The value of the item foregone/lost opportunity.
- Shows that an alternative want must go unsatisfied when a limited resources is used for something else.
5
Q
Types of resources
A
- Land
- Labour
- Capital
- Enterprise
6
Q
Land
A
- Natural resources/’gifts of nature’.
- eg. crops.
7
Q
Labour
A
- The people power (human skills + effort), and can be both mental and physical effort.
- eg. builders (physical), engineers (mental).
8
Q
Capital
A
- Manmade things used to help in the making of goods + services.
- eg. ladders, trucks.
9
Q
Enterprise
A
- The qualities someone possesses to help them perceive market opportunities and coordinate production processes.
- eg. entrepreneur.
10
Q
Needs
A
- Things necessary for survival.
- Eg. food, water, shelter, clothing.
11
Q
Wants
A
- Things not necessary for survival but we desire to make our lives better.
- Eg. pool, bigger house, newest smartphone, car.
12
Q
Reason for choice
A
Relative scarcity.
13
Q
Markets
A
An area where people in the economy produce, purchase, and consume, goods + services.
14
Q
3 basic economic questions
A
- What to produce?
- How to produce?
- For whom to produce?
15
Q
- What to produce?
A
Consumer sovereignty which is that the consumer is in charge when it comes to where resources should be allocated.
