The nature of the economic problem
Inputs used to produce goods and services
What are resources?
Natural resources used in production
What is land?
The best alternative foregone (given up)
What is opportunity cost?
Where unlimited wants are greater than finite resources
What is the basic economic problem?
Human effort used in production
What is labor?
Spending on capital goods
What is investment?
A situation where there are not enough resources to satisfy everyone's wants.
What is scarcity?
Artificial goods used in production, e.g machinery
What is capital?
The value of capital goods that have worn out or become obsolete
What is depreciation?
A product which requires resources to produce it
What is an economic good?
Risk taking and key decision making in business
What is enterprise?
Gross investment minus depreciation
What is net investment?
A product which does require any resources to make it
What is a free good?
A person who takes the risks and makes the key decisions in a business
What is an entrepreneur?
A recution in the number of capital goods caused by some obsolete and worn out capital goods not being replaced
What negative net investment?