What is economics about

What is economics? . Economics was defined as the study of mankind in the everyday business life.

What does economics study? It is the study of human efforts to satisfy what seems like unlimited and competing wants through the careful use of relatively scarce resources

What are the key terms of economics? key terms: needs, wants, and demands.

What does economics deal with? economics deals with production, distribution, exchange and consumption.

What are economic products? economic products — goods and services that are useful, relatively scarce and transferable to others.

What is the difference between goods and services? The difference between goods and services is that the services are something that cannot be touched or felt like goods.

What are consumer goods intended for? Consumer goods are intended for final use by individuals to satisfy their wants and needs.

What are capital goods? Manufactured goods used to produce other goods and services are called capital goods

What does the term “value” mean in economics? In economics the term value means something having a worth that can be expressed in dollars and cents.

What does the term “wealth” mean in economics? Another economic concept is wealth — the sum of those economic products that are tangible, scarce, useful and transferable from one person to another.

What is counted as wealth? Most economic goods are counted as wealth, but services are not.

Why does utility of consumer goods vary from one person to another? One person may, for example, get a great deal of enjoyment from a home computer, another may get very little. In the end, for something to have value, it must be scarce and have utility.

What is country’s total worth? A country’s total worth, then is the stockpile of useful scarce, tangible things in existence at a given time.

Factors of production

What is the reason people cannot satisfy all their wants and needs? The reason people cannot satisfy all their wants and needs is the scarcity of productive resources.

What are the factors of production? factors of production are called land, labour, capital, and organization or entrepreneurship

What does the term “land” mean? land means the gifts of nature or natural resources not created by human efforts.

What do economists think of land as a factor of production? It includes deserts, fertile fields, forests, mineral deposits, rainfall, sunshine and the climate necessary to grow crops.

What is labor in economic theory? labour — people with all their efforts and abilities.

What is the national labor force? labour force individuals,16 years of age or older, working or looking for work.

What does the size of labor depend on? the size of this force is related to total population the number of people available for production activities will grow as the population grows.

What categories does labor fall into? These categories are unskilled, semiskilled, skilled and professional or managerial.

What kind of work do unskilled workers perform? Most of these people work chiefly with their hands at such jobs as digging ditches, picking fruit, etc.

What category do workers with mechanical ability fall into? Workers who do not have the training to operate machines and equipment fall into the category of unskilled labour.

What kind of work are skilled workers able to do? Workers who are able to operate complex equipment and who can do their tasks with little supervisions fall into the category of skilled labour. Examples are carpenters, typists, toolmakers.

What is professional labor? . Workers with high level skills such as doctors, lawyers and executives of large companies fall into the category of professional labour.

What is a wage rate? wage rate — a standard amount of pay given for work performed.

What are the factors affecting the wage rate? the higher the level of skills, or grade of labour, the higher the average yearly wage rate

What is the third factor of production? The third factor of production is capital— the tools, equipment and factories used in production of goods and services.

What is the difference between physical and financial capital? financial capital, the money used to buy the tools and equipment used in production

When does production take place? When the three inputs — land, labour and capital — are present, production or the process of creating goods and services, can take place.

What is entrepreneurship? Entrepreneurship, the managerial or organizational skills needed by most firms to produce goods and services, is the fourth factor of production.

What role do the entrepreneurs play? The entrepreneur brings together the other three factors of production — land, labour and capital.