3.1.1

Question 1

Consumer

Answer 1

A person or organisation that directly uses a good or service

Question 2

Producer

Answer 2

A person, company or country that makes, grows or supplies goods and/or services

Question 3

Government

Answer 3

A political authority that decides how a country is run and manages this operation

Question 4

Good

Answer 4

A tangible product, i.e. a product that can be seen or touched

Question 5

Service

Answer 5

An intangible product, i.e. a product that cannot be seen or touched

Question 6

Production

Answer 6

The total output of goods and services produced by a firm or industry in a time period

Question 7

Factors of production

Answer 7

The resources in an economy that can be used to make goods and services, e.g. land, labour, capital and enterprise

Question 8

Land

Answer 8

The factor of production tax is concerned with the natural resources of an economy, such as a farmland and mineral deposits

Question 9

Labour

Answer 9

The factor of production that is concerned with the workforce of an economy in terms of both the physical and mental effort involved in production

Question 10

Capital

Answer 10

The factor of production that relates to human-made aids to production

Question 11

Enterprise

Answer 11

The factor of production that takes a risk in organising the other three factors of production. The individual taking this risk is called an entrepreneur

Question 12

Scarce resources

Answer 12

When there is an insufficient amount of something to satisfy all wants

Question 13

Unlimited wants

Answer 13

The infinite desire for goods or services consumers would like to have

Question 14

Basic Economic Problem

Answer 14

How to best use scarce resources to satisfy the unlimited wants of people

Question 15

Opportunity cost

Answer 15

The next best alternative given up when making a choice

Question 16

Economic choice

Answer 16

An option for the use of selected scarce resources

Question 17

Reasons why consumers do not maximise their benefit

Answer 17

1.Consumers are not always good at calculating their benefit
2.Consumers have habits that are hard to give up
3.Consumers sometimes copy others behaviour

Question 18

Reasons why producers do not maximise their benefit

Answer 18

1.Producers may wish to maximise sales
2.Producers may prioritise caring for customers/wider community
3.Producers may complete charitable work

Question 19

PPC (production possibility curve)

Answer 19

A PPC graph shows the different combinations of two goods that can be produced using full employment of resources

Question 19

Private sector

Answer 19

Goods and services produced by firms