Basic Concepts And Techniques

Question 0

Define choice

Answer 0

Economic choices involve the alternative uses of scarce resources

Question 1

Define the Basic Economic Problem (BEP)

Answer 1

Resources have to be allocated between competing uses because wants are infinite whilst resources are scarce

Question 2

Define economic goods

Answer 2

Goods which are scarce because their use has an opportunity cost

Question 3

Define free goods

Answer 3

Goods which are unlimited in supply and which therefore have no opportunity cost

Question 4

Define margin

Answer 4

A point of possible change (PPF)

Question 5

Define needs

Answer 5

The minimum which is necessary for a person to survive as a human being.

MATERIAL- food, water, heat
PSYCHOLOGICAL- love, self-esteem

Question 6

Define opportunity cost

Answer 6

The benefit that’s given up in order to do something else - it’s the cost of the choice that’s made

Question 7

Define Production Possibility Frontier (PPF)

Answer 7

A curve which shows all the maximum possible outputs of two goods or services using a fixed amount of inputs

Question 8

Define scarce resources

Answer 8

Resources which are limited in supply so that choices have to be made about their use

Question 9

Define wants

Answer 9

Desires for the consumption of goods and services