LS1- The Economic Problem Flashcards
What is economics?
The study of the economy
What is the economy?
All the goods and services produced in an area
What is the difference between goods and services?
Good are tangible whereas services are intangible
What are the factors of production (Def)?
Resources used to produce goods and services
What are the 4 factors of production?
Capital
Enterprise
Land
Labour
What is the economic problem?
How to use the available scarce resources to satisfy people’s infinite needs and wants
What are the 3 questions regarding resources?
- What to produce
- How to produce it
- Who to produce it for
Who are the economic agents? (Def)?
Groups of people that take part in the economy
Who are the 3 economic agents?
Producers
Consumers
Government
What do producers do?
Create goods/services
What do consumers do?
Buy goods and services made by firms
Who can consumers be?
Individuals or firms
How does the government participate in the economy?
Sets rules that other economic agents must follow
Can also provide goods and services (healthcare or railways)
