Eco terms chapter 1

Inputs

Factors of production

Outputs

Goods/services

Resources

The inputs required to produce goods and services

Production

The process of production goods or services

Producer

The people who produce goods or services

Consumption

Using goods or services

Consumer

The person who uses the good or service

Consumption expenditure

The amount you spend on something to consume

Free goods

Items we may need or want that are without limit

Economic goods

Items that we may need or want which are limited in supply

Factors of production

Land, labor, capitar, enterprise

Land

Anything to do with the earth

Labor

The physical or mental effort used to produce goods or services

Capital

Machines used to produce goods or services

Enterprise

A firm

Entrepreneur

Has the risk taking ability to bring all the other factors of production together to run a firm efficiently

Factor rewards

The payments of different factors of production require and receive in order to participate in productive activity

Land factor reward

Rent

Labor factor reward

Wages/salary

Capital factor reward

Interest

Enterprise factor reward

Profit

Factor mobility

The ease with which factors of production move from one productive activity to another

Occupational mobility

The ability of the factors of production to move from one productive task to another

Geographical mobility

The ability of the factors of production to move from one location to another

Consumer non-durables

Economic goods that are consumed quickly by all of us and satisfy immediate consumer needs or wants

Consumer durables

Economic goods that are consumed slowly by all of us and satisfy immediate consumer needs or wants

Opportunity cost

The next best alternative that is foregone in order to satisfy the other

PPC

The graphical representation of different combinations of two goods that can be produced using all given resources to the max

Negative economic growth

When the economy shrinks