Sec.1 The basic economic problem Ch.1-4 Ian Flashcards
The basic economic problem
The issue with the scarcity of resources but unlimited wants and needs (demand).
Opportunity cost
The loss of potential gain from other alternatives when one alternative is chosen.
Economic goods
Goods and services that require resources to produce/provide and has an opportunity cost.
Free goods
Goods that require no resources to produce/provide and has no opportunity cost.
Factors of production
The resources used in the production and provision of goods and services.
The 4 factors of production
Land, labour, capital and enterprise.
Land
‘Gifts of nature’ (natural resources) available for use in the production and provision of goods and services.
Labour
Human effort used in the production and provision of goods and services.
Capital (goods)
Man-made goods used in the production and provision of goods and services.
Enterprise
Risk bearing and key decision making in business.
Consumer goods
Goods used to provide satisfaction to their owners.
Capital/producer goods
Goods wanted for what they can produce.
Occupational mobility
Capability of changing use.
Geographical mobility
Capability of changing location.
Mobility of labour
The ability of labour to change where it works or in which occupation it works in.
