Topic 1 Flashcards
What are the 4 factors of production?
Capital
Land
Labour
Enterprise
What is a Normative statement?
A statement that is opinion based and cannot be tested.
What is a positive statement?
A statement that can be tested under certain conditions etc.
What is ‘Ceteris Paribus”?
Something held equal or constant.
What are examples of Capital (Factor)?
Factories
Roads
Cars/Vehicles
Buildings
Railways
What are examples of Land (Factor)?
Forestry
Gold
Oil
Rain Water
Coal
What are examples of Labour (Factor)?
Skilled
Un-Skilled
Professional
What are examples of Enterprise (Factor)?
Resilience
Risk-Taking
Innovation
Vision
What is Scarcity?
Limited availability of resources.
What are Trade Offs?
Producing more of 1 good necessity than the other.
Reallocating resources between 2 goods.
What is opportunity cost?
Producing more of one good is the amount of the other good has to be given up.
What is efficiency (PPF)?
Fully utilises all available resources and factors of production.
What does a dot inside a curve mean?
That there is an inefficient allocation of resources.
All resources not fully employed.
What does a dot on the curve mean?
Means and efficient allocation of resources.
All resources fully employed.
What does a dot outside (above) curve mean?
Means that it is unattainable with the current factors of production given to us.
