lesson 5- factors of production+ lesson 6- utility Flashcards
what are the factors of production?
Capital- anything that helps provide a good
or service
Enterprise- ideas to create a product/service
Land- the area and natural resources used
Labour-total workforce used to create
what should you consider in terms of Land
size
geography
natural resources
fertility
price
what should you consider in terms of Labour
age profile
education
experience
cost/wages
employment law
availability
unemployment rate
what should you consider in terms of capital
costs
time
efficiency
durability
reliability
size
safety
ARR
interest rate
what should you consider in terms of Enterprise
qualities of entrepreneurs
imagination
initiative
perseverance
risk taking
resilient
good communicator
what is the production possibility frontier
draw + label A,B,C
on line=maximum output
under line=not maximum output
above the line=impossible now
google for more
what is utility?
the measurement of consumer satisfaction
aim is to maximise utility
what is marginal utility?
the addition to total utility gained from consuming one extra unit
-as more units of a good are consumed, marginal utility falls