Scarcity and the Economic Problem Flashcards
Define scarcity.
A situation in which there is not enough of something to satisfy wants and needs; a situation of shortage in relation to demand.
What are economic goods? What do they involve?
Goods produced using scarce resources. Their production/consumption involves an opportunity cost.
Define Opportunity Cost.
Foregone production that resources could have been used for. E.g. Government provided covid vaccinations use scarce resources that could have been used for other things.
What are free goods?
Free goods are goods made without scarce resources. Therefore there is no opportunity cost.
Define “Land” as one of the FOPs.
Gifts of nature available for production.
Define “Labour” as one of the FOPs.
All human effort used in production, both mental and physical.
Define “Capital” as one of the FOPs.
Human-made resources used in production of other goods and services.
Define “Enterprise” as one of the FOPs.
Risk bearing and key decision making in business.
Define quantity, quality, and mobility.
How much, how good, and how easy it is to move.
What is the difference between Geographical and Occupational Mobility?
Geographical mobility refers to whether it can be moved from one PLACE to another, whilst occupational mobility refers to whether it can be moved between different USES.
What is the basic economic problem?
Choices made about how resources should be used, what should be produced, and who it should be produced for.
How geographically mobile is Land?
The physical land itself cannot be moved (highly immobile). However, the natural resources are more mobile.
How geographically mobile is Labour?
Humans are generally mobile. However, it depends on a few things. E.g. Cost of production, their want to stay where they are currently, transport, culture, cost of living, communication, and income.
How geographically mobile is Capital?
Capital is generally very mobile (tools and machinery). However, some are not (teachers, buildings, etc.).
How geographically mobile is Entrepreneurship?
Most mobile.
How occupationally mobile is Land?
Physical space can be used for many different things (highly mobile) and so can natural resources (wheat can be used for bread, pizza, cereal; etc.). However, some laws do restrict the occupational mobility of Land.
How occupationally mobile is Labour?
Generally, people can change jobs easily. However, it depends on a few things (cost of living, wages, age, quality of workspace, education skills, and how happy someone is with their job.
How occupationally mobile is Capital?
Capital is rarely used for different uses. It depends on how specialized and how creative one is.
How occupationally mobile is Entrepreneurship?
Most mobile. Not industry specific.
What are some things that increase the amount of physical Land?
Landscaping (terracing, man-made islands, drain swamplands, dams to alter the course of water) and building higher vertical space.
What are some things that reduce the amount of physical Land?
Unsustainable deforestation, overhunting, and overfishing.
What are some things that improve the quality of Land?
Fertilizers and other measures to improve soil quality (mixed farming and crop rotation).
What are some things that worsen the quality of Land?
Drought, pollution, global warming, fertilizers, and natural disasters.
What are some things that increase the quantity of labour?
A country with a high birth rate, a country with lots of immigration, the ability for women to work, and a country where people take late retirements.