ecomomics

• Economic growth refers to an increase in the production capacity or output of goods and services over time, resulting from investments made by individuals, businesses, governments, and other organizations.
• Resources: are the inputs required for the production of goods and services.
• Land: includes natural resources such as minerals, forests, water, and fertile soil.
• Labor: refers to human effort that is applied to produce goods and services.
• Labor: refers to human effort used in the production process.
• Capital: consists of physical assets like machinery, buildings, tools, and equipment that are necessary for producing goods and services.
• Scarcity: a lack of something (in this context, resources).The fundamental economic problem is that there is a scarcity of resources to satisfy all human wants and needs
• There are finite resources and unlimited wants is known as the economic problem
• Economic goods are those which are scarce in supply and so can only be produced with an economic cost and/or consumed with a price
• Opportunity Cost: the value of what has been given up when making a choice between two alternatives
• an economic good is a good with an opportunity cost
• Enterprise: the ability to take risks and run a business venture or a firm is called enterprise
• A Production Possibility Curve diagram shows this, that is, the maximum combination of two goods that can be produced by an economy with all the available resources.
• For an outward shift to occur, an economy would need to:

  1. ·     Discover or develop new raw materials. Example: discover new oil fields
  2.        employ new technology and production methods to increase productivity
  3.      increase the labour force by encouraging birth and immigration, increase retirement age, etc.

  An outward shift in PPC, that is higher production possibility, will lead to economic growth.