section 1: basic economic problem Flashcards
memorize definitions
economics
social science that describes the factors that determine the production, distribution and consumption of goods and services.
resources
inputs required for the production of goods and services
economic good
a product which requires resources to produce it and therefore has an opportunity cost
free good
a product which does not require any resources to make it and so does not have an opportunity cost
land
all natural resources. reward: rent
labour
all human resources. reward: wages/salaries
capital
all man-made resources. reward: interest
enterprise
the ability to take risks, and run a business venture. reward: profit
consumer goods
goods and services purchased by households for their own satisfaction
capital goods
human-made goods used in production
entrepreneur
a person who bears the risks and makes the key decisions in a business
occupationally mobile
capability of changing use
geographically mobile
capable of moving from one location to another location
Mobility of labour
the ability of labour to change where it works or in which occupation
Mobility of capital
the ability to change where capital is used or in which occupation
