Opportunity cost

The value of the next best alternative forgone

Production possibility curve

A graph to show the maximum that can be produced from two products and opportunity cost is the slope

Occupationally moblie

Capable of changing use

Geographically immobile

Incapable of moving from one location to another location

Occupational mobility

The ability of factors of production to move from one use to anther

Geographical mobility

The ability of factors of production to move from one area to anther

Scarcity

A situation where there is not enough to satisfy everyone’s wants

The economic problem

Unlimited wants exceed scarce resources

Factors of production

The economic resources of capital, enterprise, labour, and land

Land

Gifts of nature available for production

Labour

All human effort mental and physical involved in producing goods and services

Capital

Human made goods used in production

Enterprise

Risk bearing and decision making in business

Investment

Spending on capital goods

Depreciation

The value of replacing capital

Productivity

Output per worker hour

Economic good

A product which requires resources to produce it and therefore has an opportunity cost

Free good

A product which does not require resources to produce it and therefore has no opportunity cost

A planned economy

An economy where the government makes the crucial decisions, land and capital are state-owned and resources are allocated by directives

A market economy

An economy where consumers determine what is produced, resources are allocated by the price mechanism and land and capital are privately owned

A mix economy