Chapter 3 Flashcards
What does it mean for resources tobe scarce?
The world’s resources are finite.
What is the name of non-scarce resources?
Free (e.g Air)
What is the economic probelm?
The fact that people have infinite wants (e.g cars, houses) yet, the earth’s resources are finite, so cannot satiate this need.
What is an economy?
A system in which attempts solve the economics problem, chosing what is produced and the mix of goods and services.
What is oportunity cost?
The cost/ reprecussion caused by chosing the allocate resources to something.
What are some economic resources?
CELL
Capital
Enterprise
Land - non renewable and renewable (sustainable/ unsustaimable) natural resources
Labour
What are non-renewable resources
A finite resources such as coal, petrol ect
What are renewable resources?
Resources that can replenish:
Sustainable- can be exploited with no consequences
Non-sustainable-they are renewable, but at a cost e.g trees.
What is capital?
The stock of all tools, machines and factories that make goods and services
What’s working/ circulating capital?
Raw materials, semi finished and finished goods that are circulated around the production system until they are sold to consumers.
What is fixed capital?
Resources such as buildings and machines will not be transformed into a product and sold.
