Section 1: The basic economic problem Flashcards
Define Resources
factors used to produce goods and services.
Define Scarcity
a situation where there is not enough to satisfy everyone’s wants.
Define all factors of production
Land - gifts of nature available of production.
Labour - human effort used to produces goods and services.
Capital - human-made goods used in production.
Enterprise - risk bearing and key decision making in a business.
Define occupationally mobile
capable of changing use
Define geographically immobile
incapable of moving from one location to another.
Define mobility of labour
the ability of labour to change where it is works or in which occupation.
Define mobility of capital
the ability to change where capital is used or in which occupation.
Mobility of Labour
-Differences in the price and availability of housing
-Family ties
-Differences in educational systems
-Lack of information
-Restrictions on the movement of workers
Define Entrepreneur
a person who bears the risks and makes key decisions in a business.
Quantity of Labour
-size of population
-age structure of population
-retirement age
-school leaving age
-attitude towards working women
Define labour force
people in work and those actively seeking work.
Define productivity
the output per factor of production in an hour
Define investment
spending on capital goods
Define Gross Investment
total spending on capital goods
Define depreciation
the value of capital goods that have worn out of become obsolete.
