Key Words Flashcards
Capital
Man made resources that aid production
Land
Natural resources eg sand and wood
Labour
All human mental and physical effort that goes into production
Enterprise
Skills needed to organise other resources into some form of production
Scarcity
A situation which arises from the fact that people have unlimited wants but resources needed to meet wants are limited
Needs
Minimum that is necessary for a person to survive
Wants
Desires that are a consumption of goods and service
Opportunity cost
Cost of giving up the best alternative when a choice is mAde
Productive efficiency
When It is impossible to produce more of one good without producing less of another
Pareto efficient
When it is not possible to make one person better off without making another person worse off
Allocative efficiency
When available resources are used to produce a combination of goods and services that best match consumer tastes and preferences
Specialisation
Concentrate on a particular product or task. Allows more goods to be made
Division of labour
Each person has a specific role
Market
A set of arrangements which brings buyers and sellers into contact to trade or exchange products or services
Demand
Quantity of a product that consumers are able and willing to buy at various prices
