C2 - The Economic Problem Flashcards
1
Q
Scarce Resource
A
Economic Good
2
Q
Non-Scarce Resource
A
Free Good
3
Q
Scarcity
A
Economic agent can only obtain a limited amount of resources
4
Q
Economic Agents
A
Individuals, firms, governments, international agencies
5
Q
Basic Economic Problem
A
How to optimally distribute finite resources to best satisfy the public’s infinite wants and needs
6
Q
Opportunity Cost
A
The loss of the benefit form the second best option
7
Q
3 Basic Economic Questions
A
-What is to be produced ?
-How is production organized ?
-Who is it produced for ?
8
Q
Factors Of Production
A
-Land
-Labour
-Capital
-Enterprise
9
Q
Circulating Capital
A
Stock of raw materials
10
Q
Fixed Capital
A
Assets
11
Q
Rewards From FOP
A
Land -> Rent
Labour -> Wages
Capital -> Rent
Enterprise -> Profit
