Ch2 - Resource Utilization Flashcards Preview

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Flashcards in Ch2 - Resource Utilization Deck (16)
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0
Q

What’s the biggest problem in economics?

A

Limited resources and unlimited wants.

1
Q

Define “economics”.

A

The efficient allocation of scarce means of production to satisfy human wants.

2
Q

What are the 4 economic resources?

A

Land, labor, capital, entrepreneurial ability.

3
Q

What is the economic resource of land?

A

All the natural resources, including the ground (real estate) they are found in.

4
Q

What is the economic resource of labor?

A

The work and time of employees.

5
Q

How much of the total resource costs are paid in salary and wages labor.

A

2/3

6
Q

What is the economic resource of capital?

A

The man-made goods used to produce goods/services (plant equipment, software).

7
Q

What is the economic resource of entrepreneurial ability?

A

The extent of an individual to invest money, time and ideas in providing goods/services or start a business.

8
Q

What makes resources scarce?

A

Limited quantity.

9
Q

What is “interest”?

A

The return paid to the owners of capital.

10
Q

What is opportunity cost?

A

The lost value of the decision not selected.

11
Q

What is “full production” in an economy?

A

When resources being allocated in the most efficient manner possible. (>85% ute. Rate, 95% employment rate)

12
Q

What is the “production possibilities frontier”?

A

Full production and full employment. (guns/butter curve)

13
Q

What is the “law of increasing costs”?

A

When output of one good expands , the opportunity cost of producing that unit increases.

14
Q

What are the 3 concepts that make the law of increasing costs?

A
  1. Law of diminishing returns
  2. Diseconomies of scale
  3. Factor suitability
15
Q

What is “productive efficiency”?

A

When the max. possible output of a good is allowed, given the output of other goods.