The Economic Problem Flashcards
0
Q
What are the four factors of production?
A
Land, labour, capital, enterprise
1
Q
Define the economic problem of scarcity
A
It explains the unlimited needs of consumers, but resources are limited which can be used to produce the goods
2
Q
Define capital
A
The man made aids/inputs used to produce goods/services e.g. machinery
3
Q
Define land
A
All the natural resources used in the production process e.g. oil, fish
4
Q
Define labour
A
The human input/capital used in production e.g. employees
5
Q
Define enterprise
A
The ability to take risks and organise the other factors of production to make profit
6
Q
Define opportunity cost
A
The goods/service sacrificed due to unlimited wants and limited resources, to leave the next best alternative
