AOS 1 - SAC 1 Flashcards
Economic resources…
There are 4 economic resources used to satisfy our needs and wants they are; Land, Labour, Capital and Enterprise.
Land…
The resources that come from/occur in nature. For example; water forests, animals, minerals etc.
Labour…
The efforts of humans in the production process. It refers to the work we put in.
Capital…
Refers to the resources that are products of combining land and labour resources. For example; computer or robotics.
Enterprise…
The skills of those individuals who combine resources to produce. The ideas behind the production.
Opportunity cost…
The value of the next best alternative lost whenever a decision is made.
Relative scarcity…
- The basic economic problem the people needs and wants are virtually unlimited, but the resources we have to satisfy them are limited.
- wants and needs > resources
Perfectly competitive market…
- Large number of buyers and sellers
- Firms are price takers
- Products are homogeneous
- Ease of entry and exit
- Consumer sovereignty
- Firms are well informed about market trends
economic questions…
- What to produce?
- For whom to produce?
- How to produce?
Equilibrium…
The point when supply exactly equals demand.
Shortage…
A shortage occurs when quantity demanded exceeds the quantity supplied.
Surplus…
Where the quantity supplied exceeds the quantity demanded.
Relative price…
The price level of one good/service compared with that of another.
Resource allocation…
Resource allocation refers to the way in which resources are allocated toward the production of goods/services to satisfy the needs or households, businesses, govt. etc…
Types of efficiency…
- Allocative
- Productive
- Dynamic
- Inter temporal
