Chapter 1 Flashcards
Define Natural Resources
The naturally occurring living and non-living elements of the earth system that drive the economy and other human activities (free gifts from nature)
What are the characteristics of natural resources
-Scarce
-Have a price
-Uneven distribution
-Adding value(form utility)
What is the importance of natural resources
-Serve as inputs
-Provide opportunities for international trade
-Agriculture, forestry and fisheries
-Mining
Define labour
All the work done by people, whether they are skilled or unskilled and whether they provide physical or mental work
What are the characteristics of labour
-Income as a goal
-It is part of its owner
-Not storable
-Supply cannot suddenly increase
What is the economic importance of labour
-Production cannot take place without physical and mental effort
-Economy needs to increase production in order to grow
-Suitable labour force is needed for growth
-Needs to have the right number of skilled and semi skilled labour
-Shortage of skilled labour in SA
Define capital
Money invested in machines and equipment that will be used in the production process to change the form of materials
What are the characteristics of capital
-Made by people
-Wear out(depreciate)
-Money capital can be changed
-Real capital cant be changed
-Capital is expenive
What are the functions of capital
-Form utility
-Mass production
-Quality improvement
-Standardisation
-Makes selling on credit possible
What is the economic importance of capital
-Economic growth is a direct result in an increase in capital assets
-Savings create capital and higher investment in capital goods
-Savings is the starting point for economic growth
-Consumer spending will have to decrease
-Savings can be channelled to fixed investments
-Financial institutions will have more money available to lend
-More jobs
-Increased income will again increase savings
Define Entreprenuership
The process of bringing together the other factors of production and using them to produce or sell a good/service
What are the characteristics of entrepreneurship
-Combines the factors of production
-Initiative
-Takes risks
-Make decisions
What is the economic importance of entrepreneurship
-Contributes to economic growth
-Private sector plays a role in providing income and employment
-New goods and services
-Increases competition
-Reduces inflation
-Increase in government tax revenue
