Economics 1

Question 1

the economic problem

Answer 1

people have infinite wants whilst resources are scarce.

Question 2

planned economy

Answer 2

state decides what, how to produce.

Question 3

mixed economy

Answer 3

combination / balance of a government controlled economy and free economy.

Question 4

free economy

Answer 4

market without government regulation.

Question 5

planned economy eg?

Answer 5

north korea, china

Question 6

mixed economy eg?

Answer 6

UK

Question 7

free economy eg?

Answer 7

switzerland, ireland

Question 8

scarcity means that people must

Answer 8

make a choice (rational decisions change depending on the individual).

Question 9

need

Answer 9

a necessity and something that is someone must have to live.

Question 10

want

Answer 10

not essential, something someone would like to have.

Question 11

opportunity cost

Answer 11

next best alternative foregone

Question 12

what are the factors of production?

Answer 12

CELL
c - consumers
e - enterprises
l - land
l - labour

Question 13

primary sector with eg

Answer 13

extracting raw materials
eg. farming, mining, fishing

Question 14

secondary sector with eg

Answer 14

processing or refining materials
eg.manufacturing

Question 15

tertiary sector with eg

Answer 15

providing services to public or private sector
eg.education,health

Question 16

why has primary jobs decreased?

Answer 16

because of the industrial revolution people moved to secondary jobs

Question 17

why has secondary jobs decreased?

Answer 17

machines can now replace workers, this benefits the company as they wouldn’t have to pay wages to workers.

Question 18

markets?

Answer 18

any situation when buyers and sellers exchange goods and services.

Question 19

factor market

Answer 19

markets for factors of production (CELL).

Question 20

product market

Answer 20

final goods or services themselves.

Question 21

specialisation

Answer 21

when a group focuses on producing certain products.

Question 22

advantages for individuals

Answer 22

• high productivity
• focus on one product
• getting more skilled at their own job

Question 23

advantages for firms

Answer 23

• more quality products
• more efficient (cost per unit)

Question 24

disadvantages for individuals

Answer 24

• limited to one set of skills
• boredom

Question 25

disadvantages for firms

Answer 25

• risk of work not being complete
• more competition

Question 26

ppf curve shows?

Answer 26

combination of 2 goods that can be produced using the available rescources and highlights the concept of opportunity cost.

Question 27

points inside the curve

Answer 27

inefficient

Question 28

points outside the curve

Answer 28

not possible

Question 29

points on the curve

Answer 29

effiecient

Question 30

economic growth

Answer 30

the quantity and quality of the factors of production

Question 31

improvement in quality

Answer 31

• better use of rescources
• specialisation
• investment in capital
• more skilled workers

Question 32

capital goods

Answer 32

no immediate benefit, will allow more consumer goods to be produced in the future

Question 33

consumer goods

Answer 33

will be ‘used up’ on consumption, benefit is derrived immediately