1.1. Introduction to the economic activity

Question 1

Economic goods

Answer 1

• Not free
• Scarce
• Not everybody can have them

Question 2

Non economic goods

Answer 2

• Free
• Everybody can have them

Question 3

Primary goods

Answer 3

satisfy basic needs

Question 4

Non-primary goods

Answer 4

Fulfill higher level needs

Question 5

What do we need to note about primary goods?

Answer 5

Primary goods differ from generations and cultures

Question 6

Complementary goods

Answer 6

only fulfill a need when combined

e.g. game and xbox

Question 7

Substitute goods

Answer 7

Fulfill the same needs

e.g. motorbike and car (although depending on the context)

Question 8

Differentiable goods

Answer 8

Variety in the type of products

Question 9

Commodities

Answer 9

Same features

e.g. water, electricity

Question 10

Commodity vs. differentiable goods

Answer 10

• A commodity is a basic good used in commerce as an input in the production of services or goods.
• Little, if any, differentiation exists among commodities, which are merely taken from their natural state
• No value is added to the commodity, and all commodities of the same good sell at the same price.
• A product, on the other hand, can be differentiated and value can be added by the manufacturer as well as through branding and marketing. Products are made using commodities.

Question 11

Notes about differentiable goods

Answer 11

Advertising to emphasise differences that are not significant but contributes to brand image

Question 12

Economic activity

Answer 12

Actions that involbve production, distribution and consumption of goods and services

Question 13

Management

Answer 13

figuring how to perform activity

a range of decisions associated with the acquisiton, allocation and integration of resources (human, physical, financial, etc.) required to perform economic activity

Question 14

Why do we engage in economic activity

Answer 14

People -> Needs (different types) -> Goods/Services -> Economic activity -> Management