Economics

Question 1

Define scarcity

Answer 1

Scarcity is the concept that resources are finite (limited) and that this limitation affects economic decision making

Question 2

Explain the problem with unlimited wants

Answer 2

The problem with unlimited wants is that people desire more and more and this places pressure on limited resources

Question 3

Distinguish between renewable and non renewable resources

Answer 3

Renewable resources are those that if well managed can be replenished when used sustainably whereas non-renewable resources are those that once used can never be replenished

Question 4

What are the three causes of scarcity

Answer 4

1- demand-induced scarcity : high demand for resource - happens when the demand of the resource increases and the supply stays the same.
2- supply-induced scarcity : supply of resource running out - this happens mostly due to environmental degradation like deforestation and drought.
3- structural scarcity : mismanagement and inequality - occurs when part of a population doesn’t have equal access to resources due to political conflicts or location.

Question 5

List some non renewable resources

Answer 5

Oil, natural gas, and coal

Question 6

How does scarcity affect non renewable resources

Answer 6

Scarcity affects non renewable resources for as they are utilised, such resources become increasingly scarce. This is because once these resources are used up, they cannot be replaced, which is a major problem for humanity as we are currently dependent on them to supply most of our energy needs. This means new sources of these finite resources need to be discovered or better ways of using them need to be utilised.

Question 7

How does a scarcity affect renewable resources

Answer 7

Scarcity affects renewable resources, which are being consumed faster than their ability to replenish (e.g over fishing, excess (excess means too much) use of fresh water). This may affect economic growth in the coming decades because without careful management of renewables, future generations will not have the same access to such resources as the present generations.

Question 8

Define sustainability

Answer 8

Sustainability is the ability to maintain current consumption of a resource that does not compromise the consumption of future generations.

Question 9

Consumption definition

Answer 9

The action of using up a resource

Question 10

Economics is a social science. In this context, the word “science” means:

Answer 10

It is certain that the results of one economics experiment can be repeated by another experiment.

Question 11

Examples of collective wants

Answer 11

Good government, roads, hospitals, schools are collective wants or social wants

Question 12

The economic problem implies that

Answer 12

Some wants must be left unsatisfied

Question 13

Describe the law of supply

Answer 13

Numbers and picture form