Business - Economics

Question 1

What is the definition of economics

Answer 1

How people and the government behave or make choices with their money and resources.

Question 2

What is an economy?

Answer 2

An economy is a system of individuals, business and governments that produce, sells and buys goods and services.

Question 3

2 points of scarcity in economics

Answer 3

scarcity in economic resources requires choices to be made

it states that our needs and wants are unlimited, but economic resources are limited.

Question 4

what is financial cost

Answer 4

the price paid

Question 5

what is opportunity cost

Answer 5

what we missed out on by making a choice

Question 6

Name the 4 Factors of Production

Answer 6

Labour
Land
Capital
Enterprise

Question 7

What are the factors of production?

Answer 7

The factors of production are necessary for producing goods and services

Question 8

Explanation and economic return for Land

Answer 8

Land is all natural resources for use in the production of goods and services

The economic return is rent

Question 9

Explanation an economic return for labour (2points)

Answer 9

The workers available to help produce goods and services

different workers have different skills and experience

Economic return is wages

Question 10

Explanation and economic return for capital

Answer 10

The man made resources to produce goods and services

includes: equipment, machines, money and buildings

economic return is interest

Question 11

explanation and economic return for enterprise

Answer 11

The act of bringing together the other factors of production to produce goods and services

the economic return is profit or loss

Question 12

Definition of an economic system

Answer 12

An economic system describes how a country chooses to control its economic resources

Question 13

The 3 types of national economies

Answer 13

Market economy
Mixed economy
Controlled economy

Question 14

The 3 points for free economy + example

Answer 14

A free economy is where anyone is free to make decisions about the production of goods and services

the market determines who gets what resources and how they are distributed

government shouldn’t interfere with market

USA

Question 15

What 3 things does the government control in a market economy?

Answer 15

The police force

Public services

Laws protecting consumers and workers

Question 16

3 points on controlled economy + example

Answer 16

the government has total control over the production of goods and services

citizens are not free to set up businesses

believes that the private enterprise are not the best way to determine the distribution of resources

North korea

Question 17

2 points on mixed economy + example

Answer 17

the government and private business share the production of goods and services

the government controls certain areas of the economy but citizens can set up businesses

ireland is a mixed economy

Question 18

How does the mixed economy balance things?

Answer 18

In a mixed economy the government tries to balance the public good with private profit

Question 19

The irish economy points (4p)

Answer 19

Business create employment, pay tax and contribute to the local community

Businesses compete with each other, giving consumer more choices and lower prices

The government encourages entrepreneurship

the government has a low corporate tax rate (12.5%) that attracts global businesses to locate in ireland

Question 20

Distributions of resources in a mixed economy - individuals

Answer 20

Individuals : provide labour, pay taxes, sell land and start businesses

Question 21

Distributions of resources in a mixed economy - Organisations

Answer 21

Provide finance to buy capital resources

Hire workers and pay taxes

make products to meet consumer needs

Question 22

Distributions of resources in a mixed economy - government

Answer 22

employs workers, collects taxes, pay for public services

provides grant aid, encourages enterprise