Chap 1 Flashcards
Why are resources important?
Resources are used to make goods such as cars and to provide services, including baking, insurance etc.
Human needs and wants
Needs are the basic things we need to survive like water, food, shelter etc. Wants are things that we want to make our lives more entertaining like a fancy car, smartphones, holidays etc. But we do not need to satisfy our human wants to survive
Free goods
They are items that we may need that are without a limit. For example, natural resources like air, sunlight etc.
Consumption
Consumption involves the using up of goods and services to satisfy human needs and wants.
The Economic Problem
Resources are finite - or limited in supply.
They are used up in the production of goods and services.
But human wants for goods and services are without limit.
Because we cannot satisfy all of our wants!
Factors of production
Resources people use to produce goods and services to satisfy human need and wants.
Types of factors of production.
Land- natural resources like seas, rivers.
Labour- People who produce goods and services.
Enterprise- ability to organize production in a firm.
Capital- human made resources that are used to make/produce goods and services.
Types of factors of production.
Land- natural resources like seas, rivers.
Labour- People who produce goods and services.
Enterprise- ability to organize production in a firm.
Capital- human made resources that are used to make/produce goods and services.
