Economics

Question 1

What is scarcity

Answer 1

This is scarcity – that all consumers have unlimited wants but only limited means on which to satisfy them, resulting in consumers making a choice between two or more alternatives

Question 2

What is opportunity cost

Answer 2

The next best alternative foregone

giving up your second choice because you can only take 1

IT IS THE THING THEY FORGOE AND DID NOT WANT

Question 3

What is choice

Answer 3

Choice: A decision between two or more alternatives

Question 4

What are means

Answer 4

Means: The things we use to try and satisfy our needs and wants. That is, time, skills and money.

Question 5

What are economics

Answer 5

The study of how resources are made, used, distributed, consumed and exchanged.

Economics: The study of how people and groups use their limited means to try and satisfy their needs and wants.

Question 6

What are skills

Answer 6

Skills: Talents and abilities people may have

Question 7

What are wants

Answer 7

Want: Something we desire to have but it is not essential for survival.

Question 8

What are needs

Answer 8

Needs: What we must have in order to survive.

Question 9

What are renewable resources

Answer 9

Renewable Resource: A resource that is able to be used more than once it is sustainable.

Question 10

What are some resources

Answer 10

What are other resources we need to produce goods and services

Workers
Labor
Funds
Materials
Machinery/equipment/tools
Time
Investors/shareholders
Capital
Land
Marketing

Time is a limited resource because there are only so many hours in the day

Skills – everyone is born with different abilities and potentials. We have different levels of education and training. Our skill levels are limited. These skills allow us to earn income.

Question 11

What are natural resources and their reward

Answer 11

Natural Resources

Water

Land

Soil

Plants

Animals

Reward of natural resources – rent and basic needs

Question 12

What are human resources and their reward

Answer 12

Human resources

• Labour

Reward: wages, salary

Question 13

What are capital resources and their reward

Answer 13

Capital resources

1. machinery
2. tools
3. factories
4. buildings

These are man made goods used to produce other goods and services

Reward: interest

Question 14

What is income

Answer 14

Income – individuals or households earn income either by selling resources to firms or as a result of ownership.

Question 15

What resource do we sell

Answer 15

The resources we sell is labor. The reward for this service is wages or salary.

Question 16

Besides income, how else do people earn money

Answer 16

Households also own assets such as property and shares. The reward for ownership is dividends or capital gain when assets increase in value.

Question 17

What are wages and salaries

Answer 17

Wages is based in hours worked

Salary is a total pay that is broken down into smaller parts and paid every fortnight or weekly.

Question 18

Ethical Ideals are the only basis on whcih we make decisions about needs and wants.

T or F

Answer 18

False

Question 19

What do we assign to a good to make us choose it over other alternatives

Answer 19

Value

Question 20

What is the extended accounting equation

Answer 20

Assets + Expenses + Drawings

Liabilities + Revenue + Owner’s equity

Question 21

What are sales returns and what do you with them

Answer 21

Refunds and you take them away from the revenue section of income statement since they refunded.

Question 22

What is choice equation

Answer 22

Unlimited wants + Scare resources/means = Choice