Reasons Individuals Make Decisions
- Created by: Former Member
- Created on: 29-04-15 22:19
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- Reasons Individuals Make Decisions.
- The Economic Problem.
- Everyone has basic needs in life however they have an infinite list of wants.
- Theres a scarce amount of resources to accommodate these.
- Everyone has basic needs in life however they have an infinite list of wants.
- Factors of Production
- Land
- Natural resources found on the planet.
- Labour
- Human input into the production process.
- Everyone has different skills and labour capabilities = Human Capital.
- Capital
- Man made, physical goods, used in the production of other goods.
- Increases in the level of Capital is investment.
- Enterprise
- The entrepreneur provides the initial ideas.
- Land
- Specialisation
- Division of Labour: production is split into different tasks and specific people are allocated a task each.
- Division of Labour increases efficiency therefore more goods and services can be produced.
- Opportunity Cost
- The benefits given up in order to choose the next best alternative.
- The Economic Problem.
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