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Econ Week 1

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5 views2 pages

Econ Week 1

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Timz ..
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Resource allocation therefore involves deciding how best to use

scarce resources to satisfy as many needs and wants as possible

When making choices, we assess the opportunity cost or the alternative forgone

Land – Covers any natural resource which is used in


production. It includes the land itself, sea, forests, soil,
minerals such as coal and oil. Reward/payment for land is rent

Capital is also known as capital goods and


the reward for capital is the interest it
receives

The supply of capital depends upon the demand for


goods and services, how well businesses are doing,
and savings in the economy

labour - all the human resources available in an economy. That is, the mental
and physical efforts of workers. The reward for work is wages.

the ability to take risks and run a business venture or a firm is called
enterprise. A person who has enterprise is called an entrepreneur. Entrepreneurs
organize all the other factors of production and take the risks and decisions
necessary to make a firm run successfully. The reward to enterprise is
the profit.

Needs are things that are necessary for your survival. They are things you can't
do without. e.g. water
Wants are things that people can do without but make life more enjoyable
MOBILITY OF LAND:
it is geographically immobile but since it can be used for a variety of economic
activities it is occupationally mobile.

Mobility of capital:
Capital has varying degrees of mobility. Some capital is highly specialised. As a
result it is difficult to adapt it to other uses. Power stations and swimming pools
are examples, as also are screwdrivers and staplers. The geographical mobility of
capital is determined largely by its size and weight.

Mobility Of Capital:
Enterprise is usually highly mobile, both geographically and occupationally.

Mobility Of Land:
Labour mobility can depend up on various factors. Labour can achieve high
occupational mobility (ability to change jobs) if they have the right skills and
qualifications. It can achieve geographical mobility (ability to move to a place for
a job) depending on transport facilities and costs, housing facilities and costs,
family and personal priorities,

Economic goods are those which have a price and their supply is less in relation
to their demand or is scarce.

Free goods are products which do not require any resources to make it and so do
not have an opportunity cost. They are products for which people do not have to
pay for.

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