chapter 1 - nature of economic problem

Question 1

definition of:

basic economic problem

Answer 1

concerned with how best to allocate scarce resources in order to satisfy people’s unlimited needs and wants

Question 2

definition of:

economic agents

Answer 2

households, firms that operate in private sector of an economy and the gov

Question 3

definition of:

private sector

Answer 3

economic activity of private individuals and firms; aim to maximise profit

Question 4

definition of:

public sector

Answer 4

economic activity directly including the gov; aim to provide service to community

Question 5

definition of:

goods

Answer 5

tangible items

Question 6

definition of:

services

Answer 6

non-tangible items

Question 7

definition of:

needs

Answer 7

goods and services that are essential for survival

Question 8

definition of:

wants

Answer 8

goods and services that are not essential for services but to fulfil the desires of economic agents

Question 9

definition of:

economic goods

Answer 9

those limited in supply

Question 10

definition of:

free goods

Answer 10

unlimited in supply