Professional Documents
Culture Documents
Opportunity Cost
Factors of Production
Our wants are unlimited but our resources are limited. This
gives rise to scarcity. Therefore, we have to make decisions.
Every time a decision is made, an opportunity cost is involved.
The next best alternative forgone when an economic decision
is made
The things we need in order to make goods and services to
satisfy our wants. There are 4 factors of production:
Land: Natural, non-human resources
Payment: Rent
Labour: all human effort whether skilled or unskilled,
manual or mental
Payment: Wages/Salary
Capital: The human-made resources which help
future production
Payment: Interest
Entrepreneur: The risk-taker, decision-maker,
organiser of production
Payment: Interest
(exercise book)
Tax
Barter
Money: Function
Money: Characteristics of a
good money
Stock exchange
Labour market
Division of labour
Specialization
Wage differential
Circular flow of income
Macro Economics
Aggregate demand
Aggregate Supply
Inflation
Unemployment
x 100%
Economic Growth