First term Flashcards
Scarcity (4 marks)
Although people’s wants for goods and services are unlimited, people are never happy with the goods or services they have because they want the latest or more. The resources to make the goods or services are limited. This means no country in the world has enough resources to make enough goods to satisfy all the wants of its people. Scarcity is the basic economic problem and is the reason we have to make choices.
Example of scarce resources are: gold
Why do people borrow
People borrow because they want to buy a house or a car, they are broke, to go to university, rain day or to set up a business
What do the banks want when they increase the interest
They want people to stop spending
What do the banks want when they decrease the interest
They want people to spend more
What is a want include an example
A want is something you would like to have to make your life better or more enjoyable, for example cars, TVs and DVDs
What is a need include an example
A need is something you have to have to survive, for example water, warmth and food
What are the four factors of production (8 marks)
The four factors of production are land, labour, capital, enterprise. Land is all natural resources, for example fish, water and coffee beans. Labour is the human resources, for example fisherman, banker and teacher. Enterprise brings the other three together by taking risks, organising and putting money in to the business. Famous entrepreneurs are: Richard Branson, Elon Musk and Bill Gates. Capital is all man made resources, for example hammer, fishing net and screwdriver.
What is Hire Purchase
Hire Purchase is when you pay a monthly amount for a car or lorry for a set amount of time. However you don’t own it however at the end of the time you can pay a little more and buy it.
What is a merit good
Merit good is a good that the government
