Key Terms

Question 1

Scarcity

Answer 1

A situation where there are insufficient resources to meet all wants

Question 2

The economic problem

Answer 2

As humans we have unlimited wants but only scarce resources in relation to those wants . As a result a choice must be made

Question 3

The economic economy (the 3 questions)

Answer 3

What to produce
How to produce
For whom to produce

Question 4

Opportunity cost

Answer 4

The cost of the next best alternative which is foregone when a choice is made

Question 5

Production Possibility frontier

Answer 5

A curve that shows the maximum combination of goods or services that can be produced in a given period

Question 6

Private sector

Answer 6

The provision of goods and services by businesses that are owned by individuals or group of individuals

Question 7

Public sector

Answer 7

Government organisations that provide goods and services to economy

Question 8

Efficiency

Answer 8

Is minimising the cost and using a little resources as possible without losing the quality and producing people need