Making Decisions

Question 1

Needs

Answer 1

The basic products that people need to survive e.g. food, drink, shelter, warmth, and clothing

Question 2

Wants

Answer 2

The desire to consume goods and services. Wants are unlimited because there is no limit to the amount of goods and services people would like to consume

Question 3

Worlds Economic Problem

Answer 3

Wants are unlimited but the worlds resources are limited e.g. oil, gas, coal

Question 4

Factors of production

Answer 4

The resources used by businesses to meet needs and wants:
Land – natural resources used, e.g. physical land that a factory is on or sea for fishing
Labour – employees used to make products
Capital – the financial resources used to make products and the capital good themselves e.g. machinery purchased
Enterprise – the managerial skills to get the most efficient mix of the resources for a business

Question 5

Opportunity Cost

Answer 5

something given up when making a choice e.g. when buying a sandwich from the school canteen you give up the benefit you could have got from a hot chocolate

Question 6

Scarcity

Answer 6

resources are limited compared with our wants