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Labour
Labour is the human input into production
process.
land
Every body has different skills and qualifications
called human capital Land
If people have more human capital they are likely Land itself and the natural resources on
to be more productive. and below the land. Also includes
resources such as sea, river and lake and
what is in them
Capital
Goods that are used to produce other goods and
Enterprise services e.g. factories, machinery ,equipment
Is having and idea and taking risks in setting up education- desks, textbooks and computers. Spending
or running a business . An Entrepreneur is on capital is know as investment
someone involved e.g. investing money…read more

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Choices are made because we
cant have every thing.
The Basic Economic problem occurs
because resources are scarce but our
Resources are allocated through the wants are infinite
free working market mechanism of
demand and supply
Consumers decide what they want to
buy and produces use resources in
order to supply it
In a mixed economy (e.g. UK) The Government
will also allocate resources to providing particular
services ( education and healthcare)
Opportunity cost- the next best alternative forgone
when making a choice ­ what we give up when we
make a choice.…read more

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Private Sector Public Sector
1. Production by companies, firms 1. Production by the government
Tertiary sector- service sector-
and entrepreneurs 2. Production chosen by the government
Banking, Tourism , heath
2. Production chosen by consumers 3. Aim to provide services
services, entertainment etc.
3. Aim to make a profit 4. Goods allocated to those who need
4. Goods allocated to those willing to them
pay the price 5. Financed by government through tax
5. Financed by shareholders and 6. Based on need, not money
banks
6. Choice, Competition and Efficiency
Mixed economy- the government Secondary sector-
owns and allocates some resources, where raw materials
and the free market own and are manufactured into
Primary sector- where extraction of material goods.- car / furniture
allocate others
takes place ­ mining farming quarrying etc. maturating etc.
Market economy- is an economy where all
Free market economy ­ Planned economy- all resources resources are allocated by the force of demand
no government allocated by the government. and supply ( buyers and sellers) with a price. All
involvement in
resources are privately owned , people act in
allocation of resources.
own self interest.
Public sector- includes organizations owned and run by the
government ( hospitals , schools) not there to make a profit. Private sector- organisations owned and run by individuals or groups. Main
Government runs theses services to make sure they are objective is to get as bigger profit as possible. Other objectives include increasing
provides. They provide not only who directly using them but in size , having a greater market share, or to proved a high quality good or service.
also those who are not directly involved (positive
externalities)
Recessions can the objectives for many firms , to service .…read more

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Cost to firm Cost to the
workers
Benefits to the firm Benefits to the
workers
Grater cost of Boredom for the
Workers become Specialized workers training workers worker as they do
quicker at producing then to get higher pay the same job every
goods (increased day
productivity) specialization Quality may suffer if Workers skill may
Because of increased Workers' specific skills workers become suffer as they are
productivity , will be improved board by lack of only doing one job
production becomes Varity
cheaper per good (lower specialisation ­ being good a particular skill /job More expensive Workers may
average cost)
workers eventually be
Production levels are More motivation from replaced by
increased. job satisfaction machinery
Store of value ­ if you put £100 into a bank
you can go back and take £100 out of the bank
and it keeps its value
Unit of account-if you say a magazine is a pound
Medium of exchange- when we go into a shop we
your giving it a monetary value (unit of account)
have to pay for what we buy . Money is used as a
also know as a measure of value
medium of exchange ­ one of the most common
uses
Means of deferred payment- we can take out loans or agree future payment plans if we
do not have the money straight away. We can agree a figure and a time period in which
to pay it back in , deferring the payment by borrowing the money.…read more

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How firms compete!
Price
Quality Being in a completive market means
Competitive market ­ a market situation -There are a large number of buyers and sellers
Innovations
in which there are a large number of -New firms can set up easily in the market
Quality
buyers and sellers -Firms know what their competitors are doing
Promotions
Advertising
Branding
Implications for firms in a
competitiveness market- a
frim that can successfully
supply goods /services
consumers want to buy. At a
price they want to pay, will
thrive and earn profit. But
Firms that fail to Satisfy
Benefits for consumers- there are benefits to consumers they can shop around to consumers sufficiently will
find the best price and best quality . They have a variety of choices. Firms will try eventually fail. This applies as
hard to innovate in order to provide new products that benefit customers. In much to a huge multinational
retailing firms will compete through its locations, opening hours and providing firm as a small business.
good customer services
Disadvantages- if all firms are small they cannot gain economies of scale
and cannot pass on the benefits of low average cost in lower prices.
Consumers may become confused by a lot of competition…read more

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