Module 1 Flashcards
(23 cards)
What does economics deal with?
It deals with the problem of scarcity.
What is economics?
It is a social study
Studies human behaviour, which is unpredictable.
What are resources?
Factors of production.
Give examples of land.
Actual land Sea Mining Quarry Natural resources
What is labour?
Work
The work force
People who can work
It is the human element of production
What is a capital?
Anything man made that can be used in production
Ex : machinery
What is the entrepreneurship?
The business know how.
Who is the entrepreneur?
The person who puts factors of production together to produce something.
What is a good?
What consumers buy for personal use. It is also tangible.
Define a capital good.
A man made good that is used to make other goods.
Example: machinery
Define a public good
Provided by the government
Available to everyone
Non excludable
Non rivalled
Define a merit good.
People should have them because they deserve to have them
Examples ; hospitals, education and healthcare
Define a free good.
Absolutely free, zero cost, unlimited supply and no opportunity cost,
Example : seas, air, sunshine,rain etc..
Define a demerit good.
Considered to be bad for you
Examples: cigarettes, drugs, alcohol,
What are the 3 factors of production?
Land
Labour
Capital
Define the 4 capitals.
Fixed capital; has a repetitive use. Example machinery
Circulating capital; has a one time use, needs replacing. Example : toilet paper
Social capital ; infrastructure for people. Example : buildings
Human capital ; training and education for workers to make them more productive
What is an opportunity cost?
The next best, alternative given up whenever a choice has to be made
Give an example of opportunity cost.
If a consumer must chose between buying a car or a boat, and he chooses the car, then the boat is the opportunity cost of the car.
What do we talk about in economics?
Household
Th firm
Government
What languages do we use in economics?
Words
Graphs
Maths
What is the difference between a want and a need?
A need is something that you need in order to survive, a want is something that you don’t need in order to survive but it improves the quality of life and standard of living.
What is the main economic problem?
Resources are scare, but wants are infinite.
What is the problem of resources of allocation?
Resources are scarce but wants are infinite.
