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15 Cards in this Set
- Front
- Back
Scarcity
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have scarce resources to satisfy our unlimted want therefore we have to make choices
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opportunity cost
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next best alternative foregone
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postive statment
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able to prove true or false
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Land
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natural resources eg coal or fish
return to land is rent-cost of production occupational mobility-limted eg fishh used for food source eg retail shop geographical mobility- not mobile renewable/ non renewable-substanablitiy |
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labour
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human resource
skilled/unskilled return to labour is wages occuptional mobility- depends on skill transferability growth in labour supply may caused by immgration etc |
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Captial
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return to capital is interest
investment is the creation of captial goods in the process of production net investment is the change in the capital stock which production determines productive capacity |
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Enterprise
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the risk of organising the other 3 factors together
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Normal profit
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return required to keep the euterprenuers in the business
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Specialisation
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Self-sufficiency is where people try to meet their own wants and needs without producing a surplus to trade. Specialisation is when individuals, regions or countries concentrate on making one product to create a surplus to be traded.
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Division of Labour
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Division of labour means the specialization of the functions and roles involved in making the separate parts of a product. It is closely tied to the standardization of production, the introduction and perfection of machinery, and the development of large-scale industry. As a result of mass-production techniques, total production is many times what it would be had each worker made the complete product. Problems created by the division of labour include job monotony, technological unemployment, and eventually chronic unemployment if the economy does not expand quickly enough to reabsorb the displaced labour.
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Functions of money
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Medium of exchange,unit of account,store of value and deferred payment
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medium of exchange
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anything that is used to determine value during the exchange of good and service.allow us to go beyond barter
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double coincidence of wants
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two people have to have the appropriate goods or services which each other wants.
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Unit of account
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by using the monetary value assigned to a specific good or service to compare it to one offered by a different provider.
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Store of value
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is used to maintain the value of a transaction over time.
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