Introduction to Economics

Question 1

What is economics?

Answer 1

Explains how scarce resources are used to satisfy our needs.

Question 2

What is scarce resources?

Answer 2

1. Money
2. Labour
3. Natural resources

Question 3

Name the four role players in the economy: (Also known as the elements of economic cycle)

Answer 3

1. Government
2. Households
3. Businesses
4. Foreign sector

Question 4

Who is the government?

Answer 4

The people who were chosen by a country’s citizens to rule the country. They collect tax from households and businesses. This money is used to improve a country’s infrastructure.

Question 5

Who is the households?

Answer 5

People who live together, who have a joint income and who make economic decisions together. They are made up of families or groups. Members of households are called consumers.

Question 6

Who is the businesses?

Answer 6

Businesses produce goods and services to meet the needs of consumers. They aim to make profit by selling these goods and services to households, government or other businesses.

Question 7

Who is the foreign sector?

Answer 7

All the other countries in the rest of the world. This involves imports and exports.