1.1 Main Economic Groups

Consumer

A person or organisation that directly buys and uses a good or service

Producer

A person, company or country that makes, grows or supplies goods and/or services

Government

A political authority that decides how a country is run and manages its operation

Interdependence

An economic group responds to the actions of another economic group

Good

A tangible product that can be seen or touched

Service

An intangible product that cannot be seen or touched

Factors of production

The resources in an economy that can be used to make good and services . Resources include CAPITAL, ENTERPRISE LAND & LABOUR

Capital

The factor of production that relates to human-made aids to production, eg machinery and robots

Infrastructure

Includes human made capital that supports the operation of the production process. eg roads, rail, broadband, electricity and gas network, airports

Enterprise

The factor of production that takes a risk in organising the other 3 factors of production. The individual who takes this risk is known as an entrepreneur.

Land

The factor of production that is concerned with the natural resources in an economy, such as farmland & oil

Renewable resources

Those that can be replaced over time if they are not overused, eg wood/forests

Non-renewable resources

Those that cannot be replaced once used eg coal

Labour

The factor of production that includes all human resources which make up the workforce, eg plasterers doctors factory workers

Capital Intensive

uses a large proportion of capital compared to labour to produce products, it involves the use of machines, robots, computer-aided manufacture

Labour intensive

uses a large proportion of labour compared to capital to produce products

Role of consumer

buy goods and services for personal use

decide wat to buy by weighing up the benefits against the cost of the product

Role of Producer

Make and produce the product, decide what, how and how much to produce.

Use factors of production and sell products.

Role of Government

Tax people and businesses, impose laws and develop trade contracts