1.1)Economic Methodology, Activity and Recourses Flashcards
Economic Methodology and The Economic Problem (12 cards)
The Economic Problem
Everyone has basic needs in life, and an infinite list of things they want, which leads to the economic problem
Four Factors of Production
Land
Labour
Capital
Enterprise
What is “Land”
Territory as well as all the natural resources on it, eg.
Non-renewable resources (natural gas, oil)
Renewable resources (wind, wood)
Materials (diamonds, gold)
water
Animals found in the area
What is “Capital”
Equipment used in producing goods and services
What is “Labour”
The work done by people (the labour force)
What is “Enterprise”
An entrepreneur’s willingness to take a Risk to make a Profit
Define “Economic Activity”
Using the factors of production to create output that is consumed in order to increase people’s economic welfare
What are the “Economic Agents”
Producers
Consumers
Government
Define “Producers”
Firms that decide to make goods or provide services, and how much they are willing to charge
Define “Consumers”
People who decide to buy goods and services, and how much they’re willing to pay for it
Define “Government”
A group that sets the rules for participants in the economy and has to decide how to intervene in the way they act, as well as produce goods and services
Define “Consumption”
A form of economic activity where someone is trying to satisfy a need or want.
