4.1.1.2 The nature & purpose of economic activities Flashcards
What is the purpose of economic activity?
The central purpose of economic activity is to produce goods and services to satisfy wants and
needs.
What are the three key economic decisions?
What goods and services to produce?
How best to produce goods and services?
Who is to receive goods and services?
What is a ‘need’?
A ‘need’ something that you must have in order to live and survive i.e. necessities like water
What is a ‘want’?
A ‘want’ is something that
you would like to have, but is not essential for survival. i.e. An expensive watch
What is resource allocation?
Refers to how resources are distributed among producers and how goods and services are distributed among consumers.
What are real world examples for the three key economic decisions?
What goods and services to produce? - ? Does the economy use its resources to build more hospitals, roads,
schools or luxury hotels?
How best to produce goods and services? - Should we subsidize the electric
vehicles as a strategy to reduce carbon emissions from transport?
Who is to receive goods and services? - Which areas get
the go-ahead for major transport infrastructure projects such as Cross-Rail, HS2 and HS3 and which regions
might miss out?
