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AS Economics > MICRO - LS1 - The Economics Problem > Flashcards

MICRO - LS1 - The Economics Problem Flashcards

1
Q

Economics

A

The study of economy

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2
Q

Economy

A

Goods & services produced in an area

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3
Q

Good

A

Something tangible - can be touched and felt

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4
Q

Service

A

Something intangible - can’t touch/feel

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5
Q

An example of a good

A

Food

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6
Q

An example of a service

A

Education

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7
Q

Factors of production definition

A

The resources used to produce goods and services

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8
Q

What are the 4 factors of production?

A

Capital, Enterprise, Land & Labour (CELL)

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9
Q

Land definition

A

The natural resources available for production - known as natural capital

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10
Q

Example of land

A

Oil, forests, land

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11
Q

Labour definition

A

All work done by humans in production - quantity and quality of human input

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12
Q

Labour examples

A

Engineer/lawyer

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13
Q

Enterprise

A

Willingness of business people to take risks - they hope for profit by exploiting market opportunities

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14
Q

Enterprise examples

A

Setting up of a business and re-investing

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15
Q

Capital

A

Man-made goods used to make other goods services

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16
Q

Capital examples

A

Machinery, equipment, software

17
Q

Renewable resources definition

A

There is no limit to them, they can be replaced

18
Q

Renewable resources examples

A

Solar, wind, fish stocks, oxygen

19
Q

Non-renewable resources

A

Limited, finite, have to dig to find

20
Q

Non-renewable resources examples

A

Coal, crude oil, natural gas

21
Q

The basic economic problem

A

How to use the available scarce resources to satisfy people’s infinite needs and wants as a effectively as possible

22
Q

3 main questions due to economic problem and who decides the answers

A

What to produce? —> businesses decide based on consumer demand
How to best produce it? —> businesses decide based on the most cost effective way
Whom to produce it for? —> consumers decide based on those who have income to afford it

23
Q

Economic agents definition

A

Groups who participate in the economy

24
Q

Producers

A

Create goods and services to sell - these are firms

25
Q

Firms

A

Businesses

26
Q

Consumers

A

Buy goods and services from firms (can be individuals and firms)

27
Q

Governments

A

Set rules other economic agents must follow(how they interact) and also produce goods/services

28
Q

Automation

A

Capital machinery and new tech used to replace/enhance human labour

29
Q

Capital-Labour substitution

A

Replacing Labour with machinery

30
Q

Opportunity cost

A

The cost of the next best alternative forgone when a choice is made

AS Economics (48 decks)

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