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11 Cards in this Set
- Front
- Back
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Opportunity Cost
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This refers to having one alternative over another alternative .
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Want
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These are the things people would get if they had access to unlimited resources.
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Scarcity
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Scarcity occurs when limited resources meet infinite wants - not all wants can be satisfied as resources are not adequate.
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Factors of Production
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These are the resources that every society has, which enables it to provide goods and services to meet the needs of people.
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The 4 main groups of resources
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These are:
1. Land 2. Labour 3. Capital 4. Entrepreneurship |
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Land
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This refers to all the natural resources given to human beings by God or nature. In Economics, land is the general term used for all these resources. Examples are the sea, oil reserves, mineral deposits etc.
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Labour
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Labour is defined as the human exertion or effort that goes into the production of goods and services. This can be physical (labourers, farmers, factory workers) or mental (doctors, nurses, teachers).
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Capital / Manufactured Goods
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Capital or manufactured goods, refers to the various man-made items that were created to make the process of production easier and faster. Capital comes in two forms, namely :
•Monetary assets, which are used to purchase natural resources and other capital goods. •Physical assets, which are meant to aid in the production of goods and delivery of services. eg - laptops, screwdrivers etc. |
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Entrepreneurship
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Entrepreneurship is the active factor of production, as the other three factors are useless and cannot be used for any economic benefit without entrepreneurship. The entrepreneur is also an active factor of production - he creates ideas on how resources should be used to create goods and deliver services, and also takes on the risk involved in doing this. He is , thus, referred to as the organizer of all the other factors of production.
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Partial factors of production
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These are land, labour and capital. They rely on the entrepreneur for organization.
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Active factor of production
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This is the entrepreneur ,as he organizes all the other factors of production with his ideas to ensure that goods are provided and services are delivered to satisfy people's wants.
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