1.1.3 The economic problem

Question 1

Difference between a want and need?

Answer 1

Want is something you can live without. While need is something you rely on.

Question 2

Define the term opportunity cost.

Answer 2

The loss of other alternatives when one alternative is chosen.

Question 3

What is the opportunity cost if the government spend 100m on defence?

Answer 3

They will lose out that money investing in other sectors such as healthcare and education.

Question 4

List the 4 factors of production.

Answer 4

C - Capital
E - Enterprise
L - Land
L - Labour

Question 5

Difference between renewable and non-renewable?

Answer 5

Renewable is a resource we will not run out of, while non-renewable is something we will run out of.

Question 6

Examples of renewable and non-renewable resources.

Answer 6

Renewable - Water/Wind/Solar
Non-renewable - Fossil fuels/Nuclear energy