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. There is no opportunity cost to it.
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, entrepreneurship.
Define Land.
Raw materials supplied by nature. E.g. forests, minerals, fishing grounds etc.
Define Labour.
Human resources or human effect.
Define Capital.
Man made resources to assist production. E.g. sewing machines, hammers, tractors etc.
Define Entrepreneurship.
The person who takes the RISK of organizing the other feature of production to achieve a profit from production.
What Are Other Names For Resources?
Factors of production or inputs to production.
What Types Of Production Are There?
Goods and services.
What Types Of Goods Are There?
Consumer goods and capital goods.
What Type Of Consumer Goods Are There?
Durable goods, which are renewable goods such as a television, and non durable goods are goods that are non-renewable such as food.
Define Consumer Goods.
Goods to assist consumer’s satisfaction for their needs and wants.
What Are Natural 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.
An Example Of Factors Of Production.
To produce wine, you would need a vineyard, which is land, pickers and packers, which is labour, machines to produce wine, which is capital and the wine maker or seller, which is the entrepreneurship.
What Are Goods?
Goods are things you could touch, they are tangible. E.g. cars and televisions etc.
What Are Services?
Services are things that are done for you, they are intangible. E.g. getting a haircut or getting a bus ride etc.
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 Entrepreneur?
Profit.
What Is A Positive Good?
Positive goods are beneficial to the society. E.g. medicine etc.
What Is A Negative Good?
Negative goods are costly to the society. E.g. pollution, cigarettes etc.
What Is Interdependent?
When we rely on someone and that rely on you to get your 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 Specialization?
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 to concentrate on one specific type of production. E.g. Fishing, farming, construction.
What Is The Benefit Of Division Of Labour?
More goods and services, higher production efficiency, better quality and greater surplus.
What Methods Can Producers Use To Increase Surplus Of Production?
- Division of labour by product.
- Division of labour by process.
- Mechanization.
What Is A Disadvantage Of Specialization?
- You become interdependent.
- It can be boring or repetitive.
What Is Dependence?
When you are reliant on others for your needs and wants but they do not rely on you. E.g. baby and mother.
