nature of economics

Question 1

The economic
problem

Answer 1

Humans have infinite (unlimited) wants and needs. but only have finite (limited) resources to fulfil them.

Question 2

The factors of
Production

Answer 2

Land, Labour, Capital, Enterprise – the resources we use to produce goods and services.

Question 3

opportunity cost

Answer 3

Opportunity
Cost

The next best alternative forgone.

Question 4

ppf

Answer 4

PPF

Shows the maximum level of output of two goods that an economy can
make in a certain period of time. Illustrates opportunity cost.

Question 5

specialisation

Answer 5

Specialisation

When a person, a firm, or even a country, concentrates on producing or
doing just one thing.

Question 6

the division of labour

Answer 6

The division of
Labour

Production of a complex good or service is broken down into lots of
smaller and simpler tasks for different workers or machines.

Question 7

the market

Answer 7

The market

A place where buyers and sellers are brought together to exchange goods
and services for a price.

Question 8

free market economy

Answer 8

Free market
economy

All the resources are allocated by the market forces of supply and
demand.

Question 9

centrally planned economy

Answer 9

Centrally
planned
economy

All the resources are allocated by the government.