Factors of Production

• Limited resources are matched to unlimited wants and needs through production.
• Resources, sometimes referred to as "inputs", are used in the production of goods and services, which can be considered "outputs".
• The economic problem revolves around what to produce, how to produce, and for whom to produce.

Factors of Production

• Factors of production are resources, or the inputs available to an economy for the production of goods and services.
• Factor rewards are payments required to receive factors of production for productive activity.
• Capital refers to human-made resources used in production, with interest as its reward.
• Enterprise refers to the ability to organize production in a firm, led by entrepreneurs and business owners, yielding profit.
• Land includes natural resources used in production with rent being its reward.
• Labour refers to human resources used in production, with wages as its reward.

Factor Mobility

• Refers to how easily factors of production can be moved to one productive activity to another without additional costs or loss of output.
• Occupational mobility relates to the ability to move factors between production tasks.
• Geographical mobility is the ability to move factors of production to different locations.

Production Possibility Curve (PPC)

• The PPC illustrates the maximum output combination of two goods or services, given limited resources.
• A movement along the PPC indicates the efficient allocation of resources.
• Points outside the curve are unattainable due to insufficient resources, while points inside indicate resources are not fully used.
• Opportunity cost is the cost of making a choice, sacrificing the next best alternative.
• Shifts in the PPC indicate economic growth or decline, affecting possibilities for consumer and capital goods.

Shifts in PPC

• Growth increases the quantity or quality of resources through discoveries, technology, education, healthcare, and improved infrastructure.
• Decline, conversely, can be caused by resource depletion or aging infrastructure.

Gross Domestic Product (GDP)

• GDP is the total market value of all final goods and services produced within a country in a specific period.
• GDP can be measured using the output, income, and expenditure methods.
• Real GDP = Nominal GDP - Inflation
• Nominal GDP per capita = Nominal GDP / Population
• Real GDP per capita = Real GDP / Population

How Economies Grow

• Increased quality/quantity of resources and reallocating resources can lead to economic growth.
• Prioritizing resources to a more efficient production can grow economies.
• Improving healthcare, education or a larger workforce results in the growth of economies.

Technical Progress

• Technical progress, such as governments funding R&D, providing more and better resources.

Finding new natural resources.

• Finding new natural resources can increase output.

Better Infrastructure

• Companies can investing in more efficient machinery or a better infrastructure.

Types of Goods and Services

• Free goods like sunlight are unlimited in supply.
• Demerit/Harmful goods like drugs and alcohol.
• Merit goods are provided for the public but limited in supply.
• Public goods such as public parks and public toilets are non-rivalry/ non-excludability.
• Inferior goods includes instant noodles and canned goods.
• Luxury goods are watches and expensive cars.
• Complementary goods are those like toothpaste and toothbrushes and cars and fuel.
• Substitute goods are those like coke and Pepsi.
• Normal goods includes food and clothes and butter/margarine.
• Normal goods increase as income and demand increase.
• Capital goods includes factories and machines.
• Consumer goods are for general use by people.
• Consumer durables include washing machines, fridges as they last for several years.
• Consumer non-durables are single use like food, drinks and fuel.
• Consumer services include teachers and doctors.

Occupational Specialization of Labour

• It is the separation of tasks in an organization that leads to workers specializing in tasks like electrical engineering and computer programming.
• Factor substitution is when labour get's replaced with machinery.
• It allows employees to best use their skills.
• It can lead to more earning than unskilled employees as supply of labour is limited.

Disadvantages of Specialization

• Over specialization leads to low competition.
• Higher wages leads to rising of prices.
• Higher levels and periods of unemployment in gou spending

Developed Economies vs Less Developed

• Developed economies include industrialized nations offering large, modern, and efficient farms along with a wealthy healthy and educated population that has modern infrastructure.
• Less developed economies focus on traditional farming methods and primary industry. They offer less access to proper health and education with a poor infrastructure.

Developing Economies

• Rapidly growing economies focuses on secondary industry which is also new industrialized nations.
• Focuses on secondary industry

Division of Labour

• Division of labour is the separation of tasks involved in making a product.
• It increases the efficiency of production by breaking it down into single tasks.
• More goods can be produced, and time can be saved with division of labour.

Disadvantages of division of labour

• Work produced may be boring.
• Workers can become alienated
• Products can b standardized.
• Firms are unable to use labor flexibly

Benefits of Economic Growth

• There is more money to be made.
• Increase of tax revenue for governments.
• Improved living standards.
• Improved job growth with more profits.
• Reduced poverty with increased sales

Disadvantages of Economic Growth

• Leads to water/air/noise pollution
• Unemployment
• Source resources diminish.
• Higher levels of negative products productions
• Inflation

Poverty

• Absolute poverty, where they cannot afford basic needs for less than 1.90$.
• Relative poverty, where they can afford basic needs but not wants for less than 3.10$.

Causes of Poverty

• Linked to unemployment and lack of resources.
• Corruption, wars and conflict and those that are less fortunate like old, disabled and/or ill.

Population Structure

• Gender distribution is the ratio of male and female in a population.
• Wars & violence are causes of distortions in these levels.

The Natural Rate

• Linked to difference between deaths and births.

Deaths

• Wars, natural disasters, as well as age and healthcare impact death rates.

Births

• Living standards, contraception, marriage, religion and female employment impact birthrates.

Migration

• Migration relates to the causes of population change.
• Loss of skilled workers in developing countries.
• It boosted housing, education and welfare in developed countries.

Overpopulation

• Is population growth a cause for concern.
• Optimum population maximise output per head of the population from exist resources but too many ppl too little resources.

Dependency Ratio

• Relates to dependant population and working population.
• Under population relates to too little people and more resources, the maximised output per head of poluation from existing resources.