Economics 1.1 vocab

Wants

Desire for goods and services

Resources

Factors used to produce goods and services

The economic problem

Unlimited wants and exceeding finite resources

Scarcity

situation where there is not enough to satisfy everyone's wants

Economic good

A product that requires resources to produce it and therefore there is an opportunity cost

Free good

A product which doesn't require any resources to make it therefore there is no opportunity cost

Capital/ capital goods

Human- made goods used in production

consumer goods

good and services purchased by household for their own satisfaction

Entrepreneur

Person who bears the risks and makes key decisions in a business

Occupationally mobile

capable of changing use

Geographically mobile

capable moving from one to another location

Mobility of labour

the ability of labour to change where it works or in which occupation

Mobility of capital

the ability to change where capital is used or in which occupation

Mobility of enterprise

the ability to change where enterprise is used or in which occupation

Labour force

people in work or those actively seeking work

Productivity

the output per factor of production in an hour

Output

good and services produced by factors of production

Investment

spending on capital goods

Gross investment

total spending on capital goods

Depreciation (capital consumption)

the value of capital goods that have worn out or become obsolete

Net investment

gross investment minus depreciation

Negative net investment

a reduction in the number of capital goods caused by some obsolete and worn out capital goods not being replaced

Opportunity cost

next best alternative forgone while making an economic decision

Production possibility curve

a curve that shows maximum output of two types of products and combination of those products that can be with existing technology and resources

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