resources Flashcards
What are free goods
goods so abundant that there is no scarcity they have no price
what are economic goods
they are scarce goods that have a price
how are economics goods allocated
the price system (90%)
rationing voucher
queuing first in first served
how do we know an economic is very scarce
the price is high
what are the resources of an economy
Land
Labour
Capital
Entrepreneurship
what are positive goods
positive goods are beneficial to society e.g fresh air, medicine
what are negative goods
negative goods are a cost to society e.g waste products that pollute rivers so the water cannot be used for drinking or water
what is the payment for land
rent
what is the payment for capital
interest
what is the payment for labour
wages
what is the payment for entrepreneurship
profit
what is a subsistence society
everybody is independent working to stay at the same point as before and no surplus
what is independence
you rely on yourself and do not rely 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 more efficiently/faster. A surplus can be created for trading
what is interdependence
a situation where you rely on other and they rely on you for success/ survival
what is dependence
you rely on other and they do not rely on you e.g. baby and mother
what is the disadvantage of specialisation
- Interdependance
- Boring - repetitive
- Your skill may not be wanted in the future
what is division of labour by process
where individuals break down the production of a product or service into smaller tasks and specialise at that task.
advantages of division of labour by process
- More efficiency
- A bigger surplus than before
- More productivity
- Surpluses were now traded Imports/Exports
What is the three major innovations to improve surpluses in economy
- Mechanisation
- Division of Labour by product
- Division of Labour by process
