Lesson Glossary
Productive resources (or factors of production)
Resources (such as land, labour, and capital) that are used to produce goods and services.
land
A factor of production that includes all natural resources used to produce goods.
labour
A factor of production comprising the physical and mental effort contributed by people to producing goods and services.
Capital
A factor of production that refers to the machinery, factories, warehouses, and equipment used to produce goods and services.
Productivity
A firm’s ability to maximize output from the resources available, usually measured as the firm’s output per worker.
Real capital
A more precise term than capital for the machinery, factories, warehouses, and equipment used to produce goods and services. It is distinct from money capital.
Money capital
The funds used to acquire real capital. E
Entrepreneurship
The contribution made by an owner, manager, or innovator who organizes land, labour, and capital to produce goods and services.
Tangible resources
Physical resources (such as land and labour) that are necessary for production and are visible.
Intangible resources
Resources that are necessary for production, such as entrepreneurship, knowledge, and an environment for enterprise. Intangibles are not as visible as tangible resources, but they are no less important.
Economic system
The laws, institutions, and common practices that help a country determine how to use its resources to satisfy as many of its people’s needs and wants as possible.
Barter
The trading of goods and services without the use of a monetary system; such transactions are common in traditional economies.
Command economy
An economic system in which production decisions are made by government-appointed central planners.
Market economy
An economic system in which production decisions are made by the actions of buyers and sellers in the marketplace.
Private enterprise
A term applied to the private ownership of productive resources, a characteristic of market economies.
Mixed economy
An economic system, such as Canada’s, that contains elements of market, command, and traditional systems.
Productivity
A firm’s ability to maximize output from the resources available, usually measured as the firm’s output per worker.