Unit 1A - Introduction to Economics. Kognity 1.1.2 (The Problem of Choice)

Capital

assets used for production, such as machinery and factories

Enterprise

initiative and risk-taking ability in organising resources for production

Labour

human input into production processes, encompassing physical and mental efforts

Land

natural resources utilised for production, including terrain and minerals

Natural Resource

endowments of nature used for production, including terrain and minerals

Man-made Resource

resources generated through human intervention, excluding natural resources

Production

process of creating goods and services to meet consumer demands

Consumption

utilisation of goods and services to satisfy needs and wants

Goods

tangible products resulting from production processes

Services

intangible activities provided to fulfil specific needs or desires

Need

Goods and services required for the basis of survival. Eg. food, shelter, water, etc

Finite resources

Natural resources that can be worn out (all used up) and cannot be replaced. (i.e. coal)

Want

something that people desire but that is not necessary for survival

Opportunity Cost

The next best alternative forgone when an economic decision is made as a result of finite resources and unlimited wants.

infrastructure

Fundamental facilities and systems serving a country, city, or area, as transportation and communication systems, power plants, and schools

Free goods

Goods that are unlimited in supply and therefore have no opportunity cost.

Economic goods

Goods that are produced with scarce resources, and therefore have an opportunity cost and a price; for example, a computer or apples.