Basic Economic Problem Flashcards
1
Q
What is the basic economic problem
A
How to allocate scarce resources with unlimited wants
2
Q
What are resources
A
Factors of production
3
Q
What are factors of production
A
Capital
Land
Labour
Enterprise
4
Q
When factors of production are combined what will they produce
A
Goods and services
5
Q
What is capital
A
Man made aids to production
Machinery
6
Q
What is enterprise
A
Risk takers
Want to make profit
7
Q
What is land
A
Natural land
Where goods can be produced or taken
8
Q
What is labour
A
Human Resources that can produce goods and services
9
Q
What are the questions firms ask
A
What to produce
How to produce
For whom to produce for
10
Q
What is opportunity cost
A
The cost of the next best alternative forgone when a choice is made
