Resources Flashcards
How are Scarce Resources allocated?
The Price System
Rationing - via vouchers
Queueing system - first in first serve
What are Free Goods?
Goods that are so abundant that there is no price.
What are Economic Goods?
Scarce Goods that are allocated by the Price System, Rationing or Queueing.
What happens if Goods are extremely scarce?
The price rises.
What are the Resources?
Land
Labour
Capital
Entrepreneurship
Define Land
Raw materials supplied by nature (including wind and sun)
Define Labour
Human resources or human effort
Define Capital
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 of production and Inputs to production
What types of production are there?
Goods and Services
What type of goods are there?
Consumer goods
Capital goods
What type of consumer goods are there?
Durable goods
Non-durable goods
Define consumer goods
Goods to assist consumers satisfaction for needs and wants
What is a Renewable Resource?
Natural resources that will replenish in 100 years
What is a Non-Renewable Resource?
Natural resources that will not replenish when used (gold, oil, coal)
What are Positive and Negative goods?
Positive goods: Beneficial to our society (medicine)
Negative goods: Cost the society (polluting waters so we can’t drink it)
What is Factor Rewards?
Each part of Factor Production’s (Land, Labour, Capital, Entrepreneurship) reward
What is the difference between Goods and Services?
Goods are tangible whereas Services are intangible
What is the payment for Land?
Rent $
What is the payment for Labour?
Wages $
What is the payment for Capital?
Interest $
What is the payment for the Entrepreneur?
Profit $
What is a Producer?
Someone who makes Goods and Services
What is a Consumer?
Someone who pays for the Goods or Services created by the producer
What is Interdependent?
When you rely on someone AND they rely on you to get the Needs and Wants.
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?
When individuals concentrate on one certain 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 to concentrate on one specific type of production:
Farming
Fishing
Construction
What is the benefit of Division of Labour / Specialisation?
More Goods and Services
Higher production and efficiency
Higher Quality
Greater Surplus
What methods can Producers use to increase Surplus of Production?
Division of Labour by Product
Division of Labour by Process
Mechanisation
What is a disadvantage of Specialisation?
You become interdependent
It can become boring or repititive
What is dependence?
Where you are reliant on other people for your Needs and Wants, but they do not rely on you
What can a Surplus be used for?
Saving
Trading
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