Chapter 1 : Definitions Flashcards Preview

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Flashcards in Chapter 1 : Definitions Deck (25):
1

The three main economic groups

- Consumers
- Producers
- Government

2

Production

The total output of goods and services produced by a firm or industry in a time period

3

What are the factors of production

Capital
Enterprise
Land
Labour

4

What is the basic economic problem

How to best use limited resources to satisfy the unlimited wants of people

5

Opportunity cost

The next best alternative given up when making a choice

6

Economic choice

An option for the use of selected scarce resources

7

Economic sustainabillity

The best use of resources in order to create responsible development / growth

8

Social sustainability

The impact of development or growth that promotes an improvement in quality of life for all

9

Environmental sustainability

The impact of development / growth where the effect on the environment is small and possible to manage

10

What are the factors of production

The resources in an economy that can be used to make goods and services

11

What is the role of the consumer?

Buys goods / services

12

Name one impact of combining factors of production

Has an impact on the amount of natural resources (land) utilised
eg) production line machines may be more efficient and waste less resources than individual workers

13

Name one process that plays a part in how factors of production are combined

Advances in technology

14

Why is Ford Motor company a good example of how the combination of factors of production changes over time

At the start of the 12th century, Ford made just a few cars per day at its main factory, using many labour. Ford then started using more machines. This vastly increased it's output and changed their methods from using mainly labour to using more machines

15

How has technology advanced in the motor industry?

Machinery can now complete the majority of jobs. The use of capital has overtaken that of labour

16

What is the role of the consumer

Buys goods / services

17

What is the role of the producer

Supplies goods and services

18

What is the role of the government

Group of people that has the power to run a country.
They make and enforce rules within that country

19

Definition of the factors of production

Resources in an economy that can be used in the production process

20

What is land?

Natural resources in an economy
eg) Trees

21

What is labour

Human resources that are available
eg) Factory workers

22

What is capital

Human - made aids to production
eg) Computers

23

What is enterprise

When other factors of production are organised to make goods / services

24

Explain how car producers may combine factors of production

Car producers may decide how much of their production should be completed by machines on the production line (capital) and how much workers should be produce by 'hand' (labour)

25

What are the four main functions of money?

- Unit of account
- Store of value
- Medium of exchange
- Standard of deferred payment