1 - The Economics Problem

Question 1

What is economics?

Answer 1

The study of the economy

Question 2

What is an economy?

Answer 2

All the goods and services produced in an area.

Question 3

What is a factor of production?

Answer 3

Resources used to produce goods and services

Question 4

What are the 4 factors of production?

Answer 4

Capital
Enterprise
Land
Labour 
(CELL)

Question 5

What is capital?

Answer 5

Things which are used to make goods and services

Question 6

What is enterprise?

Answer 6

Willingness of people in business to take risks in order to make a profit

Question 7

What is land?

Answer 7

Refers to natural resources such as oil, forests and land.

Question 8

What is labour?

Answer 8

All of the work done by humans in production

Question 9

What is the economic problem?

Answer 9

How to use the scarce resources available to satisfy people’s infinite needs and infinite wants as effectively as possible

Question 10

What are the three key questions in the economic problem?

Answer 10

What to produce?
How to produce it?
Who to produce it for?

Question 11

What is an economic agent?

Answer 11

Groups that participate in the economy

Question 12

Who are the economic agents?

Answer 12

Firms
Consumers
Government
Producers

Question 13

What is a producer?

Answer 13

They create goods and services

Question 14

What is a firm?

Answer 14

A business

Question 15

What is a consumer?

Answer 15

They buy goods and services. Individuals and firms can be consumers.

Question 16

What does the government do?

Answer 16

They set rules that other economic agents must follow and they also produce some good and services like roads and healthcare.

Rule over the state at a given time