1.1.3 - The Economic Problem Flashcards
What Is The Basic Economic Problem?
(2 Points)
~ Resources are scarce.
~ There are finite resources available in relation to the infinite wants and needs that humans have.
How Does Scarcity Have A Direct Influence On Prices In The Free Market?
(2 Points)
~ The scarcer a resource, the higher the price.
~ The less scarce a resource, the lower the price.
What Is A Renewable Resource?
A resource that can be used repeatedly and be naturally replenished.
What Are Examples Of Renewable Resources?
(3 Points)
~ Wind energy.
~ Solar energy.
~ Bioenergy.
What Is A Non-Renewable Resource?
A resource that cannot be naturally replenished at a pace that keeps up with consumption.
What Are Examples Of Non-Renewable Resources?
(3 Points)
~ Oil.
~ Coal.
~ Nuclear energy.
What Is Opportunity Cost?
The cost of the next best alternative after a decision is made.
What Will Each Economic Agent Do With Regards To Opportunity Cost?
(3 Points)
~ Consumers will maximise satisfaction.
~ Producers will maximise profit.
~ The government will maximise social welfare.
What Are The 4 Factors Of Production?
~ Capital.
~ Enterprise.
~ Land.
~ Labour.
What Is The Acronym We Use For Factors Of Production?
CELL.
One Factor Of Production Is Capital, What Does This Mean?
Is the man made resources that are used to produce goods and services in the future.
One Factor Of Production Is Enterprise, What Does This Mean?
The willingness and ability to take risks of combining the other 3 factors of production in order to make a product or service.
One Factor Of Production Is Land, What Does This Mean?
Is all the natural resources used in production.
One Factor Of Production Is Labour, What Does This Mean?
Is all the productive human effort.
