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Labour
physical or mental human resources
(reward: wages)
Capital
man-made aid to production
(reward: interest)
Land
natural resources
(reward: rent)
Enterprise
someone who supplies goods to the market for profit
characteristics:
- risk-taker
- innovator
- organizes the three factors of production
Factor endowment
range of resources available in an economy
Opportunity cost
the next best alternative foregone
Specialization
the process whereby individuals, firms and economies focus on producing those products in which they have an advantage
Division of Labour
the process of production is broken down into a series of small narrowly, defined tasks
Free good
goods that have…
no price attached
no scarcity
no opportunity cost
Merit good
socially desirable good
Demerit good
Socially undesirable good
Public good
goods produced by government
(e.g.: lighthouse, national defense…don’t say public toilets)
Note 
Flashcard (32)