| 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 | -Free Goods are those that are not Scarce at all and have no Opportunity Cost from Consuming such. Air can be seen as this as it is not Scarce at all
-But Clean Air may be seen as a Economic Good because Pollution makes it more Scarce - especially in Urbanised Areas |
| 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 |
