Q&A Flashcards
What does a supply curve show?
There is a positive relationship between quantity supplied and price.
A disadvantage of a market economy.
Not enough merit goods
The scarcer a resource or product..
the higher the price consumers will pay
Labour is often one of the most expensive costs of production.
How can they lower these costs?
If firms can substitute capital (machinery) for labour, productivity often increases & costs decrease.
Geographical immobility of labour
Occurs when workers find it difficult to move from one geographical area to another in order to secure employment
Occupational immobility of labour
Refers to the ability of a worker to change occupation.
If their skill base is transferable between different occupations, then their occupational mobility is high.
The quality of land depends upon…
…the soil type, fertility, weather etc.
The two types of mobility of land
Land is geographically immobile, but is occupationally mobile since it can be used for a variety of economic activities
The reward for labour
Wages (salaries)
The supply of labour depends on…
The number of workers available (which is in turn influenced by population size, schooling, etc.)
The quality of labour depends on…
…the skills, education and qualification of labour
Reward for capital
Interest
Reward for land
Rent
Reward for enterprise
Profit
Why are choices necessary?
Because resources are scares relative to human wants, and have alternative uses.
