Resources Flashcards
What are free goods?
Goods so abundant that there is no scarcity. They have no price.
What are economic goods?
Scarce goods that have a price.
How are economic goods allocated?
Price system (90%)
Rationing- vouchers
Queuing- first in first served
How do we know an economic good is very scarce?
The price is very high.
What are the resources of an economy?
Land
labour
Capital
Entrepreneurship
Define land.
Raw materials used in production and a gift of nature.
Define labour.
It is a human effort in production of goods + services.
Define capital.
Man made equipment used to produce goods + services.
define entrepreneurship.
The person(s) who take the risks of organising the other factors of production to achieve a profit.
What are the other name for factors of production?
Inputs
Resources
Define final goods.
Consumer goods available for consumption for needs + wants.
Define durable consumer goods.
Consumer goods that last for a long time.
- car
- house
Define non-durable consumer goods.
Consumer goods that are used up immediately
- food
- cigarettes
What are the types of production?
Goods- Capital & Consumer
Services- Business & Consumer
What are renewable resources?
Replaced or replenished within 100 years
-trees
What are non-renewable resources?
Raw materials that cannot be replaced or replenished
- oil
- gold
- silver
What are positive goods?
Positive goods are beneficial to society.
What are negative goods?
Negatives are a cost to society. E.g waste products that pollute the rivers so the water cannot be used for drinking.
What is the payment for land?
The payment of land is rent.
What is the payment for capital?
The payment for capital is interest.
What is the payment for labour?
The payment for labour is wages.
What is the payment for entrepreneurship?
The payment for entrepreneurship is profit.
What is a subsistence society?
Everybody is independent
working to stay at the same point as before
No surplus
What is independence?
You rely on yourself and do not rely on others.
What is specialisation?
Individuals concentrating on a specific task. To become an expert at it.
What is division of labour?
Breaking down the production process into smaller tasks so a worker becomes a specialist.
What is division of labour by product?
Individuals concentrating on producing a specific good or service.
What is a benefit of specialisation?
- Gain more means
- time
- skill
- Higher quality goods +services more effectively/faster
- A surplus can be created for trading
What is interdependence?
A situation where you rely on others + they rely on you for success/survival
What is dependence?
You rely on others and they do not rely on you
eg mother + baby
What is a disadvantage of specialisation?
- Interdependence
- Boring- Repetitive
- Your skill may NOT be wanted in future
What is division of labour by process?
Where individuals break down the production of a product or service into smaller tasks + specialise at that task
Advantages of division of labour by process
- more efficiency
- a bigger surplus than before
- more productivity
- surpluses were now able to be traded imports/exports
What us the three innovations to improve surpluses in economy?
- Mechanisation
- Division of labour by product
- division of labour by process
Economic scarcity
It is the condition of limited resources/means relative to our wants that are unlimited.
