Economic Resources and Systems

These flashcards cover key concepts related to economic resources, allocation decisions, labor quality and quantity, and definitions in economics.

What are the three key allocation decisions that all economies must answer?

What to produce, how to produce it, and who is to receive the products produced.

What influences the quantity of labor in an economy?

The size of the population, age structure of the population, retirement age, school leaving age, and attitude towards working women.

How does the quality of labor affect production?

A higher quality of labor, through experience and better health, allows workers to be more productive and efficient.

What is the basic economic problem that necessitates allocation decisions?

Finite resources versus unlimited wants.

Define investment in the context of economics.

Spending on capital goods.

What is gross investment?

Total spending on capital goods.

How does population age structure affect the labor force?

A country with a higher proportion of working-age individuals will have more available workers.

What role does the retirement age play in the labor market?

A higher retirement age means more individuals remain in the workforce for a longer period.

How do different economic systems resolve allocation problems?

Different systems have unique institutions, organizations, and mechanisms that determine how resources are allocated.

Why is the quality of land important for economic production?

It affects the fertility and yield of crops and the health of ecosystems.