1.1 Main economic groups and FoPs Flashcards
(11 cards)
How might the factors of production be combined?
The way that FoPs combined to produce goods + services = key part of how resources allocated in an economy.
Allocation of resources = important problem in economics as the world only has limited amount of resources and increasing requirements for them from a growing population. E.g. car producers decide how much of production by hand (labour) and how much by machines (capital) = results in certain quantities of these 2 FoPs being used
What is enterprise?
When all other factors organised to make goods and services. Requires individual entrepreneur / organisation to organise production and bear the risks of the project.
Entrepreneur = person who puts enterprise into practice and one willing to take forward business idea + organise all other facts to create final goods and services. Bears financial risk of project + held responsible for it by those who have funded the project, e.g. Bill Gates
What is capital?
Human-made aids to production. Includes artificial resources that are inputs used to produce more goods and services e.g. machinery
What is labour?
Refers to available human resources. Depends on size of population, impact of migration and working age within a country. Also affected by quality of labour
What is land?; Land refers to the natural resources in an economy. All raw naturally occurring materials
Land refers to the natural resources in an economy. All raw naturally occurring materialse.g. sea
What are the factors of production?; Factor of production are the resources of an economy that can be used in the production process. Also referred to as resources and inputs. Means by which producers supply goods and services to meet requirements of consumers. 4 factors: Capital
Enterprise
What is interdependence and how does it affect an economy?; Where one group responds to the actions of another. In economics = decisions that each individual consumer
producer or government take all contribute to final choices made on how to use an economy’s resources. ach respond to actions of others
What is the government and what is its role?; Government is a group of people that has the power to run a country
make and enforce rules within that country. Some particularly affect consumers
What is a producer and what is their role?; Producers supply goods and services. Also called firms or suppliers make choices about what and how they produce. Influence over price
quality and quantity of a good they produce.
What is a consumer and what is their role?; A consumer buys goods or services for their own personal use; the end user of a good so is very last stage of production of a good. Make choices about spending
deciding whether worthwhile to buy a good
What are the three main economic groups (agents) and their role in terms of goods and services?; Consumers
producers and governmentAll have different objectives and influence in the economy by buying
