MICRO 1 - THE BASIC ECONOMIC PROBLEM Flashcards
There is _____ needs but _____ resources.
unlimited, scarce
What are the four FOP?
Land, Labour, Capital, Enterprise
What is the opportunity cost?
The highest valued alternative that had to be sacrificed for the option chosen.
What are economic goods?
Goods that are scarce and limited. (Oil, Coal)
What are free goods?
Goods that are not scarce and have no opportunity cost. (Air, Water)
What are needs?
The basic requirements necessary to existance.
What are wants?
Goods and services we wish to have.
What are sustainable resources?
Those that can be exploited over and over because they replenish themselves. (Trees, fish)
What are the 3 questions we must ask when reviewing the economic problem?
What to produce?
How to produce it?
Whom to produce for?
What is Labour?
Workers/Human resources.
What is Land?
All resources found on land including the land iteself (Minerals, ores, soil, area for building.)
What is Capital?
Goods that are made for manufacturing to make other goods. (Tractors, Conveyor Belts etc.)
What is enterprise?
A specialised form of labour, buying shares, making businesses etc.
