economics

• What is the economic problem

  Limited resources are too little to meet the unlimited wants.
• Explain the economic problem for consumer

  they cant buy anything they want at the same time, so a choice is needed to be made.
• Explain the economic problem for workers

  longer working hours and earn more money, but sacrificing leisure time
• Explain the economic problem for producers


  may only have many resources at their disposal, so if they produce more than one good, they will have to produce less of another good.
• Explain the economic problem for government

  have limited amount of money to spend on services, therefore if they spend more on one service, they will have to spend less on another service.
• Factors of production include:

  Land, Labour, Capital, & Enterprise
• what is land


  the gift of nature
• what is labour

  human resources like mental, skills and education
• what is capital


  manufactured resources (used to make another product)
• examples of capital goods


  machinery, money, railway, tools
• example of consumer goods


  canned fruits, coco cola, buy things, trains, crafts
• what is enterprise


  skills of a business person requires to combine and manage the other 3 fop successfully and the willingness
• Rewards for FOP:

  Land= rent

  Labour= wages

  Capital= interest

  Enterprise= profit
• what is geographical mobility


  the ability the move from one area to another
• what is occupational mobility

  the ability to move from one use to another
• Land mobility

  Geographical immobile - impossible to move lands from one area to another, but it is possible to reclaim lands from sea, however projects are expensive.

  Occupational mobile - possible to change the use of the land,
• Labour mobility

  Relatively Geographical mobile - can move within country and country to country. Influenced by the willingness of government and businesses to provide financial support to those willing to move.

  Occupational mobile - able to change between jobs. relatively mobile if labour is able and willing to learn new skills.
• Capital mobility 


  Geographical mobile - machinery can be moved, but some larger items would be difficult or impossible. Influenced by availability of funds to businesses

  Occupational mobile - can change for other uses, but some items may be replaced by a more modern version.
• Enterprise mobility

  Geographical mobile - can move to other countries or areas as an entrepreneur.

  Occupational mobile - can move from one occupation to another, but will depend on whether different occupation require specialist knowledge and experiences.
• the quantity and quality of fop will change if there is a change in demand or supply
• Quantity is the amount of that factor available in a specific country (supply)
• Quality is what can be improved
• Quantity and Quality of Land

  Quantity - is fixed but can be increased by reclamation from the sea

  Quality - can be influenced by crop rotation, fertilisers, irrigation system.
• Quantity and Quality of Labour

  Quantity - birth rate, death rate, the net of migration, changes in school leaving age, changes in retirement age, attitude towards women working.

  Quality - improved by government initiatives in education and training, increasing school leaving age, encourage more people to attend hight education courses, and skills training courses and experiences.
• Quantity and Quality of Capital

  Quantity - depends on funds available to firms and government to purchase equipment and machinery that are required. give financial support.

  Quality - depends on knowledge available to producers
• Quantity and Quality of Enterprise

  Quantity - influenced by government initiatives to encourage the development of an enterprise culture to encourage more people to become entrepreneurs

  Quality - influenced by availability of appropriate courses and networking opportunities to ensure that they gain the necessary skills and knowledge to be successful.
• Causes of changes in quantity and quality of fop

  change in demand or supply, change in cost of production, weather conditions, government policies.
• Define opportunity cost

  the next best alternative is given up when a economic decision is made
• PPC and definition

  Production possibility curve, is the maximum combination of any 2 categories of goods and services which can be produced in an economy.
• Microeconomic is the study of particular markets and sections of the economy, not the whole economy.
• Macroeconomic is the study of economic behaviour and decision making in the whole economy, not individual markets