4.1 - 1.2 The nature and purpose of economic activity

Question 1

Purpose of economic activity

Answer 1

The production of goods and services to satisfy wants and needs.

Question 2

Needs and Wants

Answer 2

Needs are anything essential to life, wants are anything we want that are not essential to life.

Question 3

Key economic decision

Answer 3

1.What to produce
2. How to produce
3.Whom to produce for

Question 4

Free goods

Answer 4

Characterised by abundance and cannot be traded (e.g - air, water, sand …)

Question 5

Economic goods

Answer 5

A good or service that people are willing to pay for because of its usefulness.