The economic problem Flashcards
What are the factors of production
Land, labour, capital and enterprise
Define the economic problem
Unlimited wants and scarce resources mean no society can produce sufficient products to satisfy everyones desires
Define the factors of production
Types of resource inputs used to produce goods and services
Define specialisation
When workers, firms, regions or economies concentrate on the production of a narrow range of goods and services
Define land
All natural resources including fields, mineral wealth, and fishing stocks
Define labour
Human resources, the physical and mental work of people whether by hand, by brain, skilled or unskilled
Define enterprise
The willingness to take business risks and organise production
Define capital
Man made goods used to produce more products eg factories, machines, offices and roads
Define scarcity
A situation where there are insufficient resources to create all products needed to meet all of our wants
Define opportunity cost
The benefits foregone of the next best alternative
Define choice
The selection of one option between alternatives
Define competition
When rival firms contend for customers
What is a barter
The direct exchange of products for other products without the use of money
Cerberus Paribus
A Latin phrase meaning ‘all other things being equal’
Define Consumer
An individual who buys and uses a product