Ewan Ramsay
Economics
The study of how society allocates its scarce resources.
Microeconomics
The study of the behaviour of individuals and groups within an economy.
Economic problem
Scarcity - wants are unlimited but resources are limited.
Factors of production
The resources used by firms in the production process. They are the inputs to the production process.
Land
All natural resources such as coal. Economic activity used renewable + non-renewable.
Labour
Workforce of economy. Its the physical and mental effort expanded by humans.
Capital
Man made resources wanted for what they contribute to the output e.g. machines
Enterprise
Decision-making and risk-taking factors. This is done by humans for profit.
Entrepreneur
The person who makes the decsions and takes risks, if they pay off the recieve reward.
Factor rewards
The income earned by the owners of the factors of production for their use.
Want
Something that is desired
Need
Absolute minimum resources necessary for long term physical well-being
Economy
An organised way in which a country allocates resources and distributes goods and services across a given geographical area.
Market economy
consumer based economy that relies on the consumption choices of tje consumers
Command economy
a system where the goverment determines where goods should be produced and at what price.
Opportunity cost
The satisfaction lost from the next best alternative foregone.
Economic goods
goods that have an opportunity cost
Free goods
a good that has no opportunity cost and doesn't require a sacrafice
Production possibilty frontier
a diagram that illustrates the maximum amount of one good that can be produced given a certain amount of another good, when all resources are being efficiently utilised.