Fundamentals of Economics

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What is capital?

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Capital refers to the financial assets or resources that are used to produce goods and services.

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What is financial capital?

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Financial capital is the money or liquid assets that businesses use to fund their operations and growth.

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What are the factors of production?

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The factors of production are land, labor, capital, and entrepreneurship.

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What is the cost of production?

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The cost of production is the total expense incurred in manufacturing a product or providing a service.

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Provide a situation in which production costs increase.

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An increase in raw material prices can lead to higher production costs.

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How might a company decrease its production costs?

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A company might decrease its production costs by improving operational efficiency or negotiating better prices with suppliers.

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What are imports and exports?

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Imports are goods and services purchased from other countries, while exports are goods and services sold to other countries.

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What is a trade deficit?

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A trade deficit occurs when a country's imports exceed its exports.

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What is a trade surplus?

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A trade surplus occurs when a country's exports exceed its imports.

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What are tariffs?

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Tariffs are taxes imposed on imported goods to protect domestic industries.