Grade 9 Economics: Introduction to Factors of Production and Scarcity

Vocabulary terms and definitions covering the fundamentals of economics, scarcity, and the factors of production from Grade 9 Economics Lesson 1.

Economics

The study of the production, distribution, and consumption of goods and services; the choices made for allocating scarce resources; and how government, individuals, and businesses make these choices.

Scarcity

The basic economic problem arising because resources are limited and cannot satisfy all wants and needs; specifically occurring when the demand for a natural resource is greater than its available supply.

Natural Resources

Goods that occur naturally within the environment, such as precious minerals, metals, oil, and coal, which are extracted and processed for use in production.

Rent

The income received for providing natural resources, derived from the land from which the resources are obtained.

Labour

The human input or human capital needed to produce goods or services, representing anyone in a working environment who plays a role in production.

Wages and Salaries

The form of payment received in return for providing labour.

Capital (Accounting)

The financial contribution made by the owner of a business to start the business or inject money into it.

Capital (Business)

Both the financial resources and the tangible items—such as vehicles, equipment, machinery, and buildings—used to produce goods or services.

Interest

The payment or return earned for capital (such as what is earned from a bank).

Entrepreneurship

The factor of production that organizes the other factors of production to pursue an opportunity that poses risk.

Entrepreneur

Someone who takes initiative, is innovative, and takes educated risks to ensure their business will succeed.

Profit

The payment or return received for entrepreneurship.

Technology

An additional factor of production whose introduction into a labor or capital process makes it more efficient, improving productivity and output.