Eco Definitions Flashcards
economic problem
when unlimted wants exceed limited resources
Land
Natural resources used up in production
Labour
Physical or mental effort put in by an individual to produce a good or provide a service.
Capital
Man-made resources that help produce goods and services
Enterprise
Ability to bring all these factors together to set up a firm. People who do this are called entrepreneurs.
Land
Natural resources used up in production
Labour
Physical or mental effort put in by an individual to produce a good or provide a service.
Capital
Man-made resources that help produce goods and services
Enterprise
Ability to bring all these factors together to set up a firm. People who do this are called entrepreneurs.
Wages
The reward for labour - People supply their labour to firms in return for a payment in wages. Could be paid per hour of labour, week, etc or for every task they complete.
Rent
The reward for land - Owners of the land require the payment of rent to supply these resources to firms.
Interest
Interest is paid to the people and organizations that supply or invest capital in firms.
Profit (reward)
The reward for entrepreneurs for successfully organizing production in a firm.
Opportunity cost
The next best alternative foregone
PPC
The maximum combination of any two goods that an economy can produce with all available resources, assuming a fixed level of resources and technology
