Economics

Question 1

Basic economic problem of scarcity

Answer 1

Resources are limited, but needs and wants are infinite, which necessitates choices about resource allocation

Question 1

Factors of production

Answer 1

Land, labor, capital and entrepreneurship

Question 2

Opportunity cost

Answer 2

The next best option/alternative when making a decision

Question 3

Law of demand and law of supply

Answer 3

Demand: Quantity demanded decreases as price increases
Supply: Quantity supplied increases as price increases

Question 4

Equilibrium

Answer 4

Quantity demanded equals quantity supplied

Question 5

Surplus

Answer 5

Quantity supplied exceeds quantity demanded

Question 6

Shortage

Answer 6

Quantity demanded exceeds quantity supplied

Question 7

Non-price changes in the market

Answer 7

Climate and weather, trends, technology, government policies (e.g. subsidies)

Question 8

Inflation

Answer 8

Inflation is the rate at which the general level of prices for goods and services rises
It is measured using the Consumer Price Index (CPI)
High inflation leads to reduced purchasing power and economic instability.