flashcards
economic problem definition
unlimited wants cannot be met because there are limited factors of productions this creates scarcity.
what do people “want”
a good service which people would like but is not essential for living
what do people “need”
a good service which is essential to living
what is the difference between what people want and need
the difference is one is limited and the other is not
four factors of production definition
the resources needed to produce goods and services - land, labour, capital and enterprise
land definition
all natural resources like soil and wood
labour definition
the people needed to make the products
capital definition
the finance and the machinery needed
enterprise definition
the business idea or the person who take the risk
specialsation definition
people and businesses concentrate in what they are best at
divison of labour definition
production is divided into separate tasks and each worker does just one of those tasks
why is specialsation very common now
- in ereased competition means businesses have to keep costs low
- specialised machinery is widely available
- more people recognised higher living standards can be met from being specialised
scarcity definition
there are not enough goods and services to meet the wants of the population
opportunity cost definition
the benefit that could have been gained from an alternative use of the some resources
business definition
combined factors of production to make products which satisfy people’s wants
