1.1 Main Economics Groups + Factors of Production Flashcards
What is a good?
A tangible product that can be seen and touched. For example, a chair.
What is a service?
An intangible product; things that are done for you. For example, barbers giving a haircut.
What are the 3 main economic groups?
1) Consumers
2) Producers
3) Government
What is a consumer?
A person or organisation that uses a good or service.
They are influenced by how much benefit they will gain from a good.
What are producers?
A person, company or country that supplies goods and services.
Influence the quality, price and quantity.
What is the role of the government?
A political authority that decides how a country is run.
Can impact the economy through its spending and taxation.
How is there interdependence between consumers, producers and the government?
Consumers pay tax to the government and buy off producers. The government spends money in the economy and buys off producers.
What are the factors of production?
Resources in an economy that can be used to make goods and services.
What are the four factors of production?
CELL
1) Capital
2) Enterprise
3) Land
4) Labour
What is capital and its reward?
TIM
The man - made aid to production. For example technology, infrastructure and machines.
Reward = interest
What is meant by enterprise and its reward?
The factor that involves taking a risk and organising other factors of production.
Reward = profit
What is land and the reward for offering it?
The natural resources and raw materials available for production in an economy. For example, oil.
Reward = rent
What is labour and its reward?
SAWMETH
Is the workforce available to an economy. It depends on the size and age of the population, migration, education and training of workers (quality) and health of the workers.
Reward = wages
How can factors of production be combined?
The entrepreneur buys labour, invests in capital and rents out land. They then combine labour with machinery and land to create products.
