Economics Lecture Notes

Flashcards covering factors of production, labour market dynamics, and related economic concepts.

Factors of production

Land, labour, capital, and enterprise. All businesses require one or more of these to operate.

Goods and service market

Market for goods and services consumers purchase for their own use.

Factor market

Market for any of the four factors of production, arising due to demand.

Land (as a factor of production)

Anything provided by nature that helps in the production of output.

Social capital

Refers to assets/wealth owned by the community or society in general, e.g., hospitals, parks, roads.

Working capital

Includes all finished goods, work-in-progress goods, and stocks of raw materials.

Fixed capital

Stock of fixed assets, such as plant, equipment, and tools.

Private capital

Assets owned by individuals, e.g., computers, cars.

Marginal efficiency of capital (MEC)

Extra profit earned as a result of employing one extra unit of capital.

Enterprise

Factor of production that organizes other factors to produce a good or service and takes on risk.

Labour

Human activity directed towards the production of wealth; payment is the wage.

Economic rent

Excess amount earned above the supply price; supply price is the price required to bring a factor into production.

Marginal Revenue Productivity (MRP)

Extra revenue earned when an additional unit of a factor is employed.

Labour Hoarding

Continuing to employ labour even though it is unprofitable.

Marginal physical product (MPP)

The extra output produced when an additional unit of a factor of production is employed.

Labour productivity

Measures the output produced by a worker per period of time.

Full employment

Situation where everyone who wants a job can find one at existing wage rates.

Gender pay gap

Difference in average gross earnings of female and male employees.

The So Called ‘Glass Ceiling’

Leadership positions in many firms and many areas of society is dominated by male.