Economics Chap 3 Flashcards

Productive Resources

Anything that can be used to create valuable goods and services.

Land

Natural resources that are processed to become raw materials.

Labour

Physical and mental work that is done to produce goods and services.

Real/Money Capital

Things that help increase productivity.

Entrepreneurship

The ability to develop and organize business activities, and the knowledge to organize and direct other factors of production.

Tangible Resources

Physical properties that can be seen and touched.

Intangible Resources

Lack physical properties that make them easy to quantify.

Environment of Enterprise

The social and cultural values, political and economic institutions that are conducive to doing business and foster a sense of security.

3 Production Questions

What to produce? How to produce? Whom to produce?

Traditional Economy

A economy where the things produced today, are the same things that were produced in the past, and the manner of production remains unchanged.

Command Economy

The central authority (small group of political leaders) answers all production questions based on the best interests of the state.

Market Economy

The actions of individual buyers and sellers in the marketplace determine the answers to the three basic production questions.

Mixed Economy

A economy that is a mix of multiple different economies because no single economic system can meet all the needs and wants of is members.