sector 1 Flashcards
economics problem
people have unlimited wants but limited resources
scarcity
not a low volume of things just when the resources are scarce in relation to the demand for it
economics problems questions
what to produce
how to produce
who to produce for
FOP land
natural resource-free gifts of nature e.g farm
FOP capital
man-made resources machinary
FOP labour
human resources e.g workers
FOP enterprise
entrepreneur risk takers who want to improve the company
opportunity cost
Opportunity cost is the value of the next‐best alternative foregone.
consumer 20 pounds to buy a shirt or pen he buys then can’t buy then pen. Therefore the pen is an opportunity of cost
ECA indivual
assumed to be rational consumers and chose to spend their money to get the greatest level of staifsactation
ECA firm
want to get the maximum profit and sales while still keeping good employment wealth and corporate culture
ECA government
government needs to choose what services to provide their limited tax revenue to
profit maximizing
to produce the biggest surplus of profit by having the smallest possible costs and biggest possible revenue compared to costs
why
reinvest
give out more dividends
sale maximizing
focusing on high sales and not as focused on gaining as much money as possible
why
flood the market
gain more customers
lower prices
profit satisficing
making enough money to be satisfied but not 100& driven by money
survival
to continue to exist as a business important in the short term
