Week 01: Intro Flashcards
What is Capital?
Human made goods that are used to produce other goods and services
What is Labour?
The mental and phsyical capacity of workers to produce goods and services
What is Land?
Any natural resource provided by nature that is used to produce goods and services
What is Scarcity?
The human wants are always going to be greater than the available supply of time, goods and resoucers.
What is Entrepernurship?
The creative ability of individulas to seek profit by taking risks & combining resoruces to produce innovative products.
What is opportunity Cost?
The best alterbative that has been sacrificed for a chosen alternative.
Example: John dose not have enough money to buy both an Apple watch and an Iphone. He chooses to buy the iphone instead and sacrifices his watch. Hence, his opportunity cost is the watch.
What are the three types of economic systems?
Command, Market and Mixed
What is a command market?
The government is the owner of all the country’s resources, and they call all the shots.
What is a market economy?
Individuals own and operate on their own resources to produce goods and services.
The production of goods and servces are based on consumer’s demand.
What is a mixed economy?
It comprises of elements from both command and market economy.
What is an assumtion we make when drawing a PPC?
Production posibility curve
That resources are fixed and fully employed, and that techonology advances at the rate of growth of the economy overall.
What is PPC?
A model based on the production of goods and services.
How does a PPC signal economic growth?
greater level of outputs
and
an outwards shift of the PPC.
How does a PPC signal ecnomic recession?
Lower level of outputs
and
an inwards shift of the PPC.
What does a point on the PPC signal?
A possible combination that can be produced.
