The Economic Problem
- Created by: alisha1c
- Created on: 21-09-15 13:33
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- The Economic Problem
- The theory
- All humans have psychological needs that must be satisfied in order to survive.
- Over time these needs develop into "wants".
- The Basic Economic Problem
- Our desire for "wants" is limited but the resources to produce these "wants" is limited.
- We have something called "Scarce resources", meaning the factors of production to make the goods are limited.
- Scarce resources included: C.E.L.L
- Capital
- Includes all man made resources such as: Machinery, computers or buildings. To help produce a goods and services.
- Fixed Capital: machinery, technology and factories.
- Enterprise
- This is the organisation of resources and management.
- This resource brings people together to produce output.
- Involves risk taking.
- Land
- Natural resources such as: physical land and water.
- Commodities(raw material or agricultural) e.g. coffee or copper.
- Labour
- All human resources involved in the production of making a good or service.
- The Ideal Goal
- Increase economic welfare= peoples happiness.
- This is the organisation of resources and management.
- Capital
- Because of scarcity we as a society have 3 questions and choices to make.
- 1) What goods and services to produce? (e.g. In what quantities?).
- 2) How to produce? (e.g. What technique of production?).
- 3) Whom to produce the goods and services for? (e.g. How will the products be distributed?).
- Scarce resources included: C.E.L.L
- We have something called "Scarce resources", meaning the factors of production to make the goods are limited.
- Our desire for "wants" is limited but the resources to produce these "wants" is limited.
- All humans have psychological needs that must be satisfied in order to survive.
- The theory
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