Chapter 1.1 Scarcity and the Factors of Production

Factors of production

an economic term that describes the inputs that are used in the production of goods or services in order to make an economic profit. The factors of production include land, labor, capital and entrepreneurship.

Want

have a desire to possess or do (something); wish for.

Goods

merchandise or possessions.

Need

require (something) because it is essential or very important.

Services

the action of helping or doing work for someone.

Economics

the branch of knowledge concerned with the production, consumption, and transfer of wealth.

Land

the part of the earth's surface that is not covered by water, as opposed to the sea or the air.

Human Capital

the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Scarcity

the state of being scarce or in short supply; shortage.

Capital

wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.

Labor

work, especially hard physical work.

Physical Capital

In economic theory, physical capital is one of the three primary factors of production, also known as inputs in the production function.

Entrepreneur

a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.

Shortage

a state or situation in which something needed cannot be obtained in sufficient amounts.