Basic Economic Problem
- Created by: Kdonaldson11
- Created on: 19-12-14 13:11
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- Basic Economic Problem
- Factors of Production
- Land
- natural
- oil, wood, fruit
- natural
- Labour
- human
- teacher, shop assistant
- human
- Capital
- man-made
- truck, screw driver
- man-made
- Enterprise
- organise all 3
- Lord Sugar
- organise all 3
- Land
- Mobility
- Geographical
- resources moved area/location
- Occupational
- resources used in more than one job
- Geographical
- Opportunity Cost
- Limited resources, unlimited wants
- Have to make choices
- Other choice is next best alternative
- Have to make choices
- Limited resources, unlimited wants
- Needs and Wants
- Want
- Something people would like to have in order to make life more comfortable. Not necessary for survival
- iPhone, TV
- Something people would like to have in order to make life more comfortable. Not necessary for survival
- Need
- Something people have to have in order to survive
- food, shelter, warmth
- Something people have to have in order to survive
- Want
- Goods and Services
- Good
- tangeable, can be touched
- computer, paper
- tangeable, can be touched
- Service
- intangeable, when someone does something for someone else
- Haircut, waiter
- intangeable, when someone does something for someone else
- Good
- Consumer and Capital Goods
- Consumer
- Satisfy consumers' wants
- TV, food, computer
- Satisfy consumers' wants
- Capital
- help to produce other goods/services
- lorry, drill, PC
- help to produce other goods/services
- Consumer
- Durable and non-durable
- Durable
- used over and over again
- TV, car
- used over and over again
- non-durable
- Used up, perishable
- food, drink, washing up liquid
- Used up, perishable
- Durable
- Market Systems
- Free market
- Private ownership
- anyone can produce whatever is needed to carry on business. Assets bought and sold whenever wanted.
- Freedom of choice
- everyone free to choose own job and what they want to buy
- Competition
- firms compete with one and other for business, having obtained it they cannot ever be sure for the future
- Free market
- where buyers and sellers meet to exchange goods and services, not always physical place - TV, auctions
- Private ownership
- Planned economy
- Planned Production
- national plan involves setting targets for industries
- Prices
- prices are not free to change due to changes in demand and supply, prices are fixed by government
- Profit
- goods and services not produced in prospect of making profit, businesses produce what government thinks the people want
- Public ownership
- government owns means of production
- Planned Production
- Mixed economy
- mix of free market and planned economy
- Individals make many decisions but government interveres
- Providing public and merit goods
- Providing employment and support
- Prevent pollution
- place laws
- Individals make many decisions but government interveres
- mix of free market and planned economy
- Free market
- Public and merit goods
- Public
- Provided by government
- Non-rivalry
- one person or group of people using service or good does not stop others from using and benefiting from it
- Non-excludability
- one person or group of people using the good or service does not stop others from using it
- Non-rivalry
- Provided by government
- Merit
- felt to benefit society, if left to private sector would be under-provided and under-consumed
- Public
- Private and Public sector
- Public
- organisations and firms owned by members of general public
- Private
- organisations and firms owned by government
- Public
- Factors of Production
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