chapter 3 Flashcards
basic economic problem
resources have to be allocated between competing uses because wants are infinite and resources are scarce
capital
as a factor of production is the stock of manufactured resources used in the production of goods and services.
choice
economic choices involve the alternative uses of scarce resources
economic goods
goods that are scarce because they use an opportunity cost
entrepreneurs
individuals who seek out profitable opportunites for production and take risks in attempting to exploit these
enterprise
as a factor of production is the seeking out of profitable opportunites for production and taking risks in attempting to exploit these
factors of production
the inputs to the production process, these are land, labour, capital and enterprise
fixed capital
economic resources such as factories and hospitals which are used to transform working capital into good and services
free goods
goods that are unlimited in supply and which therefore have no opportunity cost
human capital
the value of productive potential of an individual or group or workers, it is made up of the skills, talents, education and training of an individual or group and represents the value of future earnings and production.
labour
as a factor of production is the workforce
land
as a factor of production, is all natural resources
needs
the minimum that is necessary for the person to survive as a human
non-renewable resources
resources which once exploited cannot be replaced
opportunity cost
the benefits forgone of the next best alternative
