What does Land and Natural Resources Refer to?
Refers to all those resources that occur in nature
What are resources?
Things that are used to produce goods and services. Also referred to as factors of production
What does Labour refer to?
Refers to the mental and physical effort made by humans in the production process
What does capital refer to?
Those resources that have been made by combining labour and natural resources to create a more sophisactaed input in the production process.
What does Entrepreneurship refer to?
Refers to the skills of those individuals who combine our resources to produce goods and services
What is economics?
allocation of resources
What is economic activity?
Process of production, income and expenditure that takes place in every economy.
Define Positive economics
Fact based economic statements. They can be verified or tested to be either true or false
Define Normative economics
Opinion or value judgements. They cannot be verified or tested to be either true or false.
What is microeconomics?
The study of the economic behaviour of individual consumers as well as businesses.
What is macroeconomics?
Builds on the foundational knowledge developed in microeconomics and involves the analysis of economy wide phenomena.
What is relative scarcity?
Limited resources - Unlimited wants.
What is opportunity cost?
The benefit sacrificed when choosing alternative ones.
What is a production Possibility curve?
All the points along the curve that represent the maximum production possibillites achievable at that particular point in time.
Points outside the possibility curve means??
Not achievable today but are achievable in the future
Points inside the PPC means?
Underutilization of resources.
What is productive efficiency defined as?
The situation where a nations resources are producing the maximum amount possible and at the lowest cost.
What is allocative efficency?
When resources are distributed to produce specific goods and services that best satisfy society’s needs and wants.
What are the 3 basic economic questions?
What, Whom and how much to produce?
What does the household sector provide?
Provides the business sector with resources such as labour in return. (Flow 1)
What does the business sector provide?
Provides the household sector with income such as labour in return. (Flow 2)
Will increase in GDP of economic activity raise material living standards?
Yes.
What are trade offs?
to gain something of value with our time or money. we forego the opportunity to do a range of other things with that time or money.
Cost benefit analysis
helps determine the best trade off to minimize opportunity cost
