| What is the Basic Economic Problem? | -How can the Available [Scarce] Resources satisfy People's Infinite Needs and Wants as Best as Possible? |
| What are the 4 Factors of Production | Land, Labour, Capital, Enterprise |
| What is Land? [Factors of Production] | -Land Includes Non-Renewable Resources [Oil & Natural Gas] Renewable Resources [Tidal or Wood] Materials via Mining, Water & Animals
-Almost all things that are in 'Land' are Scarce |
| What are Free Goods? Use Air as an Example | -Air is not a Scarce Resource - Everyone can have as much as they'd like. But since there's enough to Satisfy Everyone, then it is Impossible to Sell Air.
-This is Free Goods: Goods that People get for Free and that there's little point to Sell, as why Buy Something you get for Free. |
| Summarise Labour [Factors of Production] | -Labour is Work Done by People contributing to the Production Process - the Labour Force
-There are also People Capable of Working, and Old Enough, but don't have a Job - Unemployed
-People who isn't in Paid Employment, but still provide People's Needs and Wants
-Different People have Different Levels of Education, making some people more Valuable - Productive - in the Workplace - Greater Human Capital |
| Summarise Capital [Factors of Production] | -Capital is Equipment, Factories and Schools that help to Produce Goods / Services
-Capital has to be MADE first - Crucial Difference to Land
-Much of it is Paid by the Government ie Infrastructure |
| Summarise Enterprise [Factors of Production] | -Entrepreneurs taking Risks and creating Things from the other 3 Factors of Production
-Run Firms and could Fail, or Succeed taking in Profit as a Reward |
| What is Economic Activity? | -Combining the Factors of Production to make Output that People can Consume.
-The purpose of Economic Activity is Increasing the Economic Welfare of People via making Outputs that Satisfy their Needs and Wants |
| What are some of the Forms of Economic Activity? | -Making of Goods [Physical Products] and Services [Intangible Things]
-Consumption of Goods and Services - Satisfying Needs and Wants
-Housework, DIY and Bringing up Children [May not be Paid but is still Economic Activity as Services are being Provided] |
| What are the 3 Fundamental Questions that come about from the Economic Problem? | -What to Produce
-How to Produce
-Who to Produce For |
| What are the Agents [Participants] in an Economy? | -Producers: Decides what to Make, and Selling Price
-Consumers: What they want to Buy, and how much they'll Spend
-Governments: How much to Intervene in how Producers and Consumers Act. |
| What does it mean to be 'Rational'
-Why is this Relevant? | -Rational People make Decisions that are the Best for themselves. This will be based on Economic Incentives [Maximise Behaviour]
-Relevant as Market Economies assume all Economic Agents are Rational |
