econ 💵🌎 Flashcards
what are economic goods
they are goods that require resources to produce, therefore being finite.
what are free goods
products which do not require any resources to make and one which doesn’t have an oppurtunity cost. An example of this would be sunlight or air. Enterprises can capitalise on such resources though.
what is meant by ‘the economic problem’
the economic problem describes the concept of finite goods and resources vs infinite wants and needs of people
what does the production of goods depend on?
the quantity and quality of factors of production
what are the four factors of production?
land
labour
capital
enterprise
land
land covers any natural resource which is used in production.
labour
labour covers all human effort. This includes both the mental and physical strength power involved in producing goods and services.
human capital is the education, training and experience that workers have gained. The more human capital workers have, the more they are capable of producing
capital
capital is any (manufactured) good used to produce other goods and services.
It includes, for example, offices,factories, railways and other infrastructure.
capital vs consumer goods
consumer goods are produced for the satisfaction of consumer demand
capital is are wanted for their ability to produce such consumer goods.
whether or not a good is capital or consumer depends on the user and the purpose of use.
e.g expensive cooking tools can be bought by a chef who works in a kitchen in which case they would be capital goods
they can also be bought by a person who does cooking as a hobby in which case they would be consumer goods.
enterprise
enterprise is the willingness and ability to bear uncertain risks and to make decisions in a business
what does occupationally mobile mean?
being capable of changing use
what does being geographically mobile mean?
physically movable to another place.
what is opportunity cost?
It is what you give up to buy what you want with regards to goods and services.
whats an example of oppurtunity cost?
for example there are a variety of things you could do tomorrow between 5pm and 6pm . This may be to go shopping, meeting a friend, reading or cooking. You will have to make a decision, meaning youd have to give up other options based on which one will give you the best return.
what are consumers?
buyers and users of goods and services.
what is an example of oppurtunity cost in terms of consumers?
consumers have to make a choice between products to buy. For example, between two phones,they are likely to choose the one with good qualities and a cheap price.
how does undertaking a job involve opportunity cost
People often choose between jobs to take. Their choices can be influenced by factors such as income and working conditions.
e.g If one decides to become a therapist as opposed to a neuroscientist and these factors improve for neuroscientists, the opportunity cost of being a therapist increases. it may increase to the point where therapists decide to become neuroscientists instead.
