Economics

Question 1

What is the economic problem?

Answer 1

How to make the best use of limited resources. People’s needs and wants are endless, resources to satisfy the needs and wants are limited. The problem of what to produce, how to produce it and for whom to produce it.

Question 2

What are the 4 types of resources?

Answer 2

Land
Labour
Enterprise
Capital

Question 3

What are land resources?

Answer 3

Land resources are all elements of the natural environment
‘-> All natural resources.
Eg. Water, minerals, plants.

Question 4

What are labour resources?

Answer 4

Labour resources is human intellectual and physical effort to make a good or service.
Eg. Doctor, carpenter, receptionist.

Question 5

What are enterprise resources?

Answer 5

Enterprise resources are human resources
‘-> A person or idea that makes the company/business money
Eg. Automatic teller machine.

Question 6

What are capital resources?

Answer 6

Capital resources are man-made or manufactured goods that makes the final products.
Eg. Computer, printer, sewing machine.

Question 7

What is the opportunity cost?

Answer 7

It is the real cost of a choice made.

Eg. What good you are missing out on if you purchase a different product.

Question 8

What is the difference between needs and wants?

Answer 8

Wants are goods or services you would like to have but don’t necessarily need. Eg - new phone.
Needs are goods or services that are necessary for survival.
Eg - food, water, shelter.

Question 9

What is a planned economy?

Answer 9

Government plays major role in economy and makes all of the decisions