DARTUTORS
Revision Material
Scarce
When there is only a limited amount of resources
Goods
These are things made of resources
Services
These are actions that are produced through labour
Production
The process of creating goods and services. The use of resources to make and all goods and services to satisfy our wants.
Inputs
These are resources which are placed into productive activities and goods and services.
Outputs
These are the productive activities and goods and services which are created using resources
Producers
The people who make and sell goods and services. They can be business owners, managers, or employees.
Factors of Production
The resources required to produce the things we would like to have. This is the scare resources used up in the production of goods and services to satisfy our wants. In addition to natural resources, such as timber, coal and many crops, they include the people who go to work or run business organisations and the buildings, machinery and equipment they use.
Land
This is the natural resources not created by humans. The fertile soil vital to the growth of plants, minerals such as coal and oil, and animals for their meat and skins, are known as natural resources, but economics call it this. This therefore includes the seas and rivers of the world, forests and deserts, all manner of minerals from the ground, chemicals and gases from the air and the earth's crust.
Labour
The people with all their efforts, abilities, and skills. Nothing can be produced without people. They provide the physical and mental effort to make goods and services. People who work with their hands and use their brains to help make goods and services provide human resources, or what this is termed as. The size and ability of an economy's _______ force are very important in determining the quantity and quality of the goods and services that can be produced. The greater the number of workers, and the better educated and skilled they are, the more an economy can produce.
Enterprise
The skills and willingness to take the risks required to organise activities. While most people have the ability to contribute to the production of goods and services, not everyone could be a successful business person and be able to employ and organise resources in a firm. This is business know-how, or the ability to run a production process.
Firm
This is an organisation that owns a factory or a number of factories, offices, or perhaps even shops, where goods and services are produced.
Entrepreneurs
A risk taker in search of profits who does something new with existing resources. The people who have enterprise and can control and manage firms are called this. They are the people who take the risks and decisions necessary to make firms run successfully.
Capital
The tools equipment, machinery, and factories used in the production of goods and services. This is the man-made resources which help to produce many other goods and services. Units of factors of production are known as and called this.
Free Goods
These are any resources that are not scarce.
Products
The outputs from productive activities, and an economics term also used to describe all goods and services. Goods and services are the outputs or _________ of productive activity using scare resources. Goods and services are also referred to as economic goods because they are not freely available.
Consumption
We use up goods and services or products to satisfy our needs and wants.
Consumers
People and organisations who are willing and able to buy goods and services to satisfy their needs and wants.
Consumption Expenditure
The spending of the people who buy goods and services to satisfy their wants (consumers)
Exchange
Trade-in goods and services between producers and consumers. People can satisfy some of their wants by producing a number of goods and services for their own consumption. In order to obtain the goods and services they cannot produce themselves they must engage in trade or Most people are able to do this by going to work to earn money. They then do this with the money for the goods and services they want that are produced by other workers
Consumer good
Any good that satisfies consumers' wants
Consumer Durable Goods
A term used to describe goods that are consumed or used up by people over a relatively long period of time such as a washing machine, computer, and mobile phone.
Non-durable goods
Products that are perishable or used up quickly
Consumer Services
Sometimes our wants are satisfied by someone doing something for us
Capital Goods
Man-made resources which help to produce other goods and servics
Public Goods
Goods or services, such as street lighting and sea defences, that are provided for free by a government because all consumers will benefit from them whether they pay for these products or not. It is therefore impossible to charge different individuals or firms different prices for the amounts they consume. Goods and services which are provided by a government because everyone benefits from them, even if they do not pay for them. A government provides these goods and services as no private firm would wish to produce them, because nobody would pay for their use.
Merit Goods
Goods or services, such as education and health care, usually provided by a government because they can benefit everyone in society. Sometimes a government will also provide goods and services because it thinks that people ought to benefit from them, even if they cannot afford to buy them, and to benefit the economy (health care and education)
Scarcity
The condition that results from society not having enough resources to produce to produce all the things people would like to have. Wants are unlimited but the resources used to produce the goods and services to satisfy our wants are limited. Nobody can have sufficient goods and services to satisfy all heir needs and wants.
Opportunity Cost
The benefit foregone by giving up the next best alternative use of scarce resources. The true cost of something is what we have to give up to get it. It is the benefit we could have enjoyed from the next best alternative we choose to go without. It arises not only when we choose to buy things but also when we choose how to allocate scarce resources to the production of different goods and services. The problem with resource allocation therefore involves evaluating the trade-offs of alternative uses. Choosing one use means going without another.
Production Possibility Curve (PPC)
A curve that shows the combined maximum possible output of two products an economy can produce efficiently with existing resources and technology. It shows how much of one product must be given up to produce more of the other. This is a useful way to show how a decision to devote more resources to producing one product means fewer resources are available to produce other goods. It is also called a Production Possibility Frontier or Boundary. This therefore shows the combined maximum possible output of two products or groups of products a firm, or even an entire economy, can produce efficiently with existing resources and technology.
Economics
The study of how people try to satisfy unlimited and competing wants through the careful use of scarce resources. The purpose of this involves advising how best to use scarce resources in order to make goods and services to satisfy as many wants as possible. In other words, this attempts to increase people's choice and maximise their economic welfare. When people have more goods and services to choose from, they are better off.
Conflicts of interests
The satisfaction of wants by the making of goods and services has also brought with it the problems of pollution and the destruction of the environment. Choosing between alternative uses of scarce resources therefore involves this. People cannot always get what they want and some will be dissatisfied or adversely affected by the choices made by others.
Need
A basic requirement for survival
Gross Domestic Product (GDP)
The dollar value of all goods and services and structures produced within a country in a year.
Wants
Human desires for goods and services. They are unlimited. A way of expressing a basic requirement for survival
Financial Capital
Money used to buy the tools and equipment used in the process of creating goods and services.
Economic Choice
Another term used to describe products that require scarce resources to produce them to satisfy human needs and wants and are therefore limited in supply.
