Economics Unit 1

The Basic Economic Problem

- humans have unlimited wants

- problem: earth has limited (scarce) resources

- cannot cater to our infinite wants

- resources have to be shared and rationed

- rationing: economics

- price filters out the people who don't really want the good

- people will pay for scarce goods, but not for free goods

Factors of Production

- CELL

- Capital, Enterprise, Land and Labour

- Factors of Production includes what is required in order to make a good/service

- Capital: products (usually machines) which are used in order to create a good/service

- Enterprise: person (or a group) who have the…