Economics keyterms #2 Flashcards
From online textbook
Define Entrepreneur
someone who organises production and identifies potentially profitable projects to be undertaken.
Define Management
the use of economic theories and principles to make decisions regarding the allocation of scarce resources.
Define produced resources
inputs that are the product of a previous
manufacturing process.
Define fixed capital
resources manufactured for the purpose of producing other goods, for example machine and factories.
Define working capital
made up of goods that are used up during the production process.
What does rewards to the factors of production mean?
The factors of production need to be rewarded in return for the services that they provide.
Define Interest
the return on the use of capital services. It is the return that the firm gains from using the capital goods in the production process.
Define division of labour
and specialisation
a process whereby the production procedure is broken down into a
sequence of stages, and workers are assigned to specialise in particular
stages according to their skills
Define human capital
The stock of skills and expertise that contribute to a worker’s productivity
Define labour productivity
The amount of output produced per worker
Define the term short run
the period over which a firm is free
to vary its input of one factor of production
(labour), but faces fixed inputs of the other
factors of production(capital)
Define the term long run
the period over which the firm is able to
vary the inputs of all its factors of production
Define the term very long run
the period over which the firm is able to vary the inputs of all its factors of production and in which technological
change may occur and the government policy environment may alter
Define market economy
market forces are allowed to guide the
allocation of resources within a society
