Intro & Basic Economic Problem

Question 1

What is the economic problem?

Answer 1

How do we allocate scarce resources to satisfy unlimited wants?

Question 2

What are needs?

Answer 2

Needs are what are essential for survival (like food and water etc)

Question 3

What are wants?

Answer 3

Wants are things we would like to own but are not essential (like mobile phones)

Question 4

Resources are…

Answer 4

….finite

Question 5

Our wants are…..

Answer 5

…..infinite

Question 6

What are the four factors of production?

Answer 6

1. Capital
2. Enterprise
3. Labour
4. Land

Question 7

What is “Capital”?

Answer 7

“Capital” is the money and equipment used to produce the product or service such as a sewing machine. As a reward, you would get interest.

Question 8

What is “enterprise”?

Answer 8

“Enterprise” is having an idea of how to use the land, labour, and capital to make a profit. A CEO would have done this. As a reward, you would get profit.

Question 9

What is “labour”?

Answer 9

“Labour” is the people who work in the business such as teachers, joiners, builders, or doctors. We measure qualifications and experience through human capital. For example, a tailor. As a reward, you would get a wage/salary.

Question 10

What is “land”?

Answer 10

“Land” is the natural resources used in the production of a product such as water, oil, fields, or wood—for example, silk. As a reward, you would get rent.

Question 11

What is opportunity cost?

Answer 11

Opportunity cost is the cost of giving up the next best alternative by making a choice.

Question 12

What is worker specialization?

Answer 12

Refers to the idea when a worker concentrates on making a product or completing a set task.

Question 13

What is town specialization?

Answer 13

Refers to the idea when a town or geographical area concentrates on making a product or completing a set task

Question 14

What is country specialization?

Answer 14

Refers to the idea where a country concentrates on making a product or completing a set task.

Question 15

What are the 3 sectors of production?

Answer 15

1. Primary Sector
2. Secondary Sector
3. Tertiary Sector

Question 16

What is the primary sector?

Answer 16

The primary sector involves companies specializing in extracting and producing raw materials from the natural environment. A few examples of companies involved in the primary sector are fishing, mining, farming, and oil production.

Question 17

What is the secondary sector?

Answer 17

The secondary sector involved companies specializing in processing and manufacturing from the resources obtained by companies in the primary sector. A few examples of companies that are involved in the secondary sector are car manufacturers, food production, and building companies.

Question 18

What is the tertiary sector?

Answer 18

The tertiary sector involves companies that provide services. These services are activities that are done by people or businesses for consumers. A few examples of companies that are involved in the tertiary sector would be hairdressers, banks, supermarkets, and cinemas.

Question 19

What is globalisation?

Answer 19

Opening markets to trade with other countries; Economies rely on each other.

Question 20

What is protectionism?

Answer 20

Taxes on foreign imports. So domestic goods are more competitive.

Question 21

What is a market?

Answer 21

A market is a place where sellers and buyers can interact in order to exchange goods, services, and/or information.

Question 22

What is a product market?

Answer 22

A product market is where goods and products are bought and sold.

Question 23

What is a factor market?

Answer 23

A factor market is where the different factors of production, like capital, land, and labour, are bought and sold.

Question 24

How do product and factor markets link together?

Answer 24

Product and factor markets link together as factor markets provide resources for the product markets. The efficiency affects one another.

Question 25

What is the purpose of markets?

Answer 25

Markets are very important as they allow space where governments, businesses, and individuals can buy and sell their goods and services

Question 26

What is a negative externality?

Answer 26

The cost incurred on a third-party not involved in a transaction.

Question 27

What does renewable mean?

Answer 27

Resources which do not run out

Question 28

What does Non-renewable mean?

Answer 28

Resources which do run out.