1.1

Question 1

Scarcity

Answer 1

Scarcity is the basic economic problem that arises because people have unlimited wants but
resources are limited and there’s not enough supply of everything to meet all wants.

Question 2

Resources

Answer 2

Economics is about the allocation of resources among society’s various needs and
wants.

Question 3

Trade offs

Answer 3

a situation where having more of one thing leads to
having less of another.

Question 4

Opportunity cost

Answer 4

opportunity cost is what must be given up in order to undertake any activity
or economic exchange.

Question 5

Factors of production

Answer 5

land
labour
capital
entrepreneurship

Question 6

Profit maximisation

Answer 6

a firm determines the price and output
level that returns the greatest profit.

Question 7

Sales maximisation

Answer 7

Where a firm sells as much as possible without making a loss.

Question 8

Satisficing

Answer 8

when a firm does not seek maximum profit or
sales but achieves a “good enough” level of profit to ensure survival

Question 9

Non-Financial motives

Answer 9

Desire to be your own boss.
Prove yourself.
Employment.
Independance
Love the business world
Lifestyle choice