Resources Flashcards
How are Scarce Resources allocated?
The Price System
Rationing - via vouchers
Queuing System - First In First Served
What are Free Goods?
Goods so abundant that there is no price for them.
What are economic goods?
Scarce goods that are allocated by the Price System or Rationing or Queuing.
What happens if goods are really scarce?
The price rises.
What are the Resources?
Land, Labour, Capital and Entrepreneurship.
Define Land?
Raw materials supplied by nature.
Define Labour?
Human Resources or Human Effort.
Define Capitol?
Man-made resources used to assist production.
Define Entrepreneurship?
The person who takes the RISK of organising the other factors of production to achieve a profit from production.
What are other names for resources?
Factors or Production or Inputs to Production.
What types of production are there?
Goods and Services
What are Renewable Resources?
Natural resources that will replenish in 100 years.
What are Non-Renewable Resources?
Natural resources that will not replenish when used, e.g. oil, coal, gold.
What is a Subsistence Economy?
Everybody works independently just to maintain their current living standards. There is no surplus produced.
What is independent?
You rely on yourself for needs and wants. You do not rely on others.
What is specialisation?
Individuals concentrating on one task to improve productivity and efficiency.
What is Division of Labour
Breaking down the production process into small tasks.
What is Division of Labour by Product?
Breaking the labour up to concentrate on one specific type of production. E.g. farming or fishing or construction.
What is the benefit of Division of Labour?
- More goods and services.
- Higher production and efficiency.
- Better quality for their goods and services.
- Greater surplus.
