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What are the three main economic groups?
Consumers, producers and the government
What can these groups be referred to as?
Economic agents through their interdependence
Definition of a good
A good is something tangible (something that can be seen and touched) e.g. mobile phones
Definition of a service
A product that is intangible (something that can’t be seen or touched) E.g. Financial advice
What is a consumer?
Someone buys goods and services (end user of a good)
What makes up the consumers motivation to buy a good service?
They weigh up the benefits and satisfactions against the price they would have to pay to obtain it
Purpose of the Producer
Supply goods and services and choose what and how they produce to maximise their profits (They choose the price and quantity of the goods they produce)
Purpose of the government
A group of people that have the power to run a country in order to maximise the welfare of the consumer e.g. age restrictions
interdependence Between the consumer to the government
Pay Taxes
Independence from the government to the consumer
They provide age restrictions and laws
Regulate supply to protect the consumer from the producer
Interdependence from the produce to the consumer
Sell goods to the consumer for profits
Independence from the consumer to the producer
Consumers buy from producers to maximise self satisfaction
Independence from the producer to the government
Provides employment benefiting the government
Making the country internationally competitive
Pay corporate tax for public services
Independence from the government to the producer
Give them Subsidies increasing supply decreasing prices, increasing total revenue
Definition of the factors of production
Factors of production Are the resources in an economy that can be used in the production process
What are the four factors of production?
C-Capital
E-Enterprise
L-Land
L-Labour
What is Land
Natural or raw materials used in the production process eg coal, oil and gas
What is labour?
Total human resources that are available To provide a certain task or job aiding the production process
What is capital?
artificial(human made) Resources That are used to produce more goods and services
Capital letters human made and supports and enables the operation of the production is called infrastructure e.g. Broadband, roads electricity network
