• An economy is a system of individuals, businesses and governments that produces, sells and buys goods and services.
• A country’s economy is called a national economy. • The world economy is the global economy.
• Economics is the study of how individuals, organisations and governments make choices about how to allocate limited resources.
• Economic resources are the factors used to produce goods and provide services. They are generally grouped as land, labour, capital and enterprise.
• Land is all the natural resources available in a country for use in the production of goods and services. • Labour is all the workers who are available in a country to help produce goods and services.
• Capital is all the human-made resources that are available in a country to help produce goods and services.
• Enterprise is the act of the person or business that brings together the land, labour and capital to produce goods and services.
• The basic economic problem is that our needs and wants are unlimited but economic resources are limited.
• The gap between unlimited needs and wants and limited economic resources leads to scarcity. Scarcity requires that choices are made.
• An economic system is how a country controls its economic resources to produce goods and services.
• A free economy is an economy in which anyone is free to make decisions about the production of goods or services.
• A controlled economy is an economy in which the government has total control of the production of goods and services.
• A mixed economy is an economy in which the government and private business share the production of goods and services.
• Ireland has a mixed economy.
• In a mixed economy, individuals, organisations (profit and not-for-profit) and the government work together to distribute economic resources.
Taking stock A
Go to page 211 of your Activities and Accounts Book to check what you have learned in chapter 29.
