the economic problem

  • Created by: Emilysh02
  • Created on: 05-06-19 14:15
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  • the economic problem
    • 'how to best satisfy infinite desires using limited resources'
      • everyone has their basic needs and everyone also has an infinite list of things they want.
    • there are four factors of production
      • land
        • including all natural resources in and on it.
      • labour
        • the work done by the people
      • capital
        • equipment used in producing goods and services
      • enterprise
        • willingness to take a risk to make a profit.
    • economic agents react to incentives
      • economic agents:
        • producers
        • consumers
        • governments
    • scarcity requires the careful allocation of resources
      • in economics a wide range of things count as economic activity
      • one form of economic activity is the making of goods and the provision of services
        • goods: 'physical' products you can touch
        • services: 'intangible' things
      • another form of economic activity is consumption

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