Video Notes: Capital, Factors of Production, and Market Concepts (Flashcards)

A set of Q&A flashcards covering key concepts from the notes: capital (physical and human), entrepreneurial ability, factors of production, goods vs. services, scarcity/shortages, trade-offs and opportunity costs, marginal analysis, production possibilities curve, efficiency, and economic systems.

What is Capital in economics?

Capital refers to human-made resources that are used to produce other goods and services.

What is Physical Capital?

Physical capital consists of tangible, human-made objects used to create other goods and services (tools, machinery, buildings).

What is Human Capital?

Human capital is the knowledge and skills a worker gains through education and experience.

What is Entrepreneurial Ability?

Entrepreneurial ability is the capacity to identify and turn ideas into action by taking risks to create and manage a new business.

What are the four factors of production?

Land, Labor, Capital, and Entrepreneurship (Entrepreneurial Ability).

What is Land in economics?

Land refers to all natural resources used to produce goods and services (oil, minerals, water, forests, etc.).

What is Labor?

Labor is the effort people devote to tasks, which is paid for.

What is Capital (as a factor of production)?

Capital refers to the tools, equipment, and buildings used to produce goods and services (physical capital).

What are Goods?

Goods are physical objects produced for sale (tangible items).

What are Services?

Services are actions or activities one person performs for another (medical care, makeup artistry, etc.).

What is a Shortage?

A shortage occurs when consumers want more of a good or service at a given price than producers are willing to supply.

What is a Trade-off?

A trade-off is giving up one benefit to gain another, often involving time, money, or resources.

What is Opportunity Cost?

Opportunity cost is the value of the next best alternative forgone when making a choice.

What does Thinking at the Margin mean?

Thinking at the margin means deciding how much more or less to do by adding or subtracting one unit (of time, money, etc.).

What is Marginal Cost?

Marginal cost is the cost of adding one more unit of a good or activity.

What is Marginal Benefit?

Marginal benefit is the extra benefit obtained from adding one more unit of a good or activity.

What is the Production Possibilities Curve?

A graph that shows the alternative ways to use a society's productive resources.

What does Efficiency mean in production?

Efficiency is the use of resources in a way that maximizes output of goods and services.

What are the main economic systems mentioned?

Command, Market, and Traditional economic systems.