Unit 2: Fuction Of The Economy Flashcards
Division of labor
Specialization by workers
Capital productivity
Output per unit of capital employed
Factors of production
The inputs to the production process; Land,which is all natural resources
Labour, which is the workforce
Capital, which is the stock of manufactured recourses used in the production of goods and services
Entrepreneurs, individuals who seek out profitable opportunities for production and take risks to attempting to exploit these.
Fixed capital
Economic resources such as factories and hospitals which are used to transform working capital into goods and services
Human capital
The value of the productive potential of an individual or group of workers. it is made up of the skills, talents education and training of an individual or group And represents the value of future earnings and production
Labor productivity
Output per a worker
Market
Any convenient set of arrangement by which buyers and sellers communicate to exchange goods and services
Non-renewable resources
Resources such as coal or oil which one exploited cannot be replaced
Non-sustainable resource
Resource which is being economically exploited in such a way that it is being reduced overtime
Primary sector
Extracted and agricultural industries
Productivity
Output per a unit of input employed
Profits
The reward to the owners of a business. it is the difference between a fun’s revenues and it’s cost.
Renewable resources
Resources ,such as fish stocks or forest, which can be exploited over and over again because they have the potential to renew themselves
Secondary sector
Production of goods, mainly manufactured
Specialisation
A system organization where economic units such as households or nations are not self-sufficient but concentrate on producing certain goods and services and trading the surplus with others
Stakeholders
Groups of people which have an interest in the firms, such as shareholders, customers, suppliers, workers, the local community in which it operates and government
Sustainable resource
Renewable resource which is being economically exploited in such a way that it will not diminish or run out
Tertiary sector
Production of services
Utility
The satisfaction derived from consuming a good.
Welfare
The well-being of an economic agent or group of economic agents
Working or circulating capital
Resources which are in the production system waiting to be transformed into goods or all of the materials before finally sold to the consumer
Economy
A social organization (system) through which decides about what, how and for whom to produce are made/ AOR
Attempts the solve the basic economic problem
Types of economies
Household
Local
National
International
Free market: tries to solve economic problem with little government intervention
Command economies: the state makes most AOR decisions
Land
Which is all the natural resources
