Part One: Economics, Economy, Good, Service
An Economy - all the goods and services produced in an area
The difference between a good and service:
o Good - physical product
o Service - intangible product
Largest Economies in the world
o US
o China
o Japan
o Germany
o UK
Part Two: Factors of Production
Factors of Production - resources used to produce goods and services
4 factors of production are:
1. Land
2. Labour
3. Capital
4. Enterprise
Capital - things which are used to make goods and services
Enterprise - the willingness of people in business to take risks to make profit. Entrepreneurs
organise land, labour and capital
Land - refers to natural resources such as oil, forests and land itself. It can be renewable and
non-renewable.
Labour - all of the work done by humans in production
Part Three: The Economic Problem, Key Decisions, Economic Agents
The Economic Problem - how to use all the available scarce resources to satisfy people's
infinite needs and infinite wants as effectively as possible
3 key questions about the economic problem:
1. What to produce?
2. How to produce it?
3. Who to produce it for?
Economic Agents - groups that participate in the economy
Economic agents include:
o Producers
o Consumers
o The government
Producers - create goods and services
Consumers - buy goods and services made by firms. Individuals and firms can be consumers
The government - sets the rules that other economic agents must follow. It also produces
some goods and services like roads and healthcare
Land and enterprise is not scarce
Capital can be scarce as firms might lack finance / labour
Labour can be scarce due to lack of skills, experience or qualifications
An Economy - all the goods and services produced in an area
The difference between a good and service:
o Good - physical product
o Service - intangible product
Largest Economies in the world
o US
o China
o Japan
o Germany
o UK
Part Two: Factors of Production
Factors of Production - resources used to produce goods and services
4 factors of production are:
1. Land
2. Labour
3. Capital
4. Enterprise
Capital - things which are used to make goods and services
Enterprise - the willingness of people in business to take risks to make profit. Entrepreneurs
organise land, labour and capital
Land - refers to natural resources such as oil, forests and land itself. It can be renewable and
non-renewable.
Labour - all of the work done by humans in production
Part Three: The Economic Problem, Key Decisions, Economic Agents
The Economic Problem - how to use all the available scarce resources to satisfy people's
infinite needs and infinite wants as effectively as possible
3 key questions about the economic problem:
1. What to produce?
2. How to produce it?
3. Who to produce it for?
Economic Agents - groups that participate in the economy
Economic agents include:
o Producers
o Consumers
o The government
Producers - create goods and services
Consumers - buy goods and services made by firms. Individuals and firms can be consumers
The government - sets the rules that other economic agents must follow. It also produces
some goods and services like roads and healthcare
Land and enterprise is not scarce
Capital can be scarce as firms might lack finance / labour
Labour can be scarce due to lack of skills, experience or qualifications
