Providing goods/services

Question 1

Define opportunity cost

Answer 1

the sacrifice of the next best option thats been given up

Question 2

Name 2 types of resources

Answer 2

1. renewable
2. non-renewable

Question 3

What is a renewable resource

Answer 3

a resource that can be replenished

Question 4

What is a non-renewable resource

Answer 4

a resource that cannot be replenished

Question 5

What are the three sectors of the economy?

Answer 5

1. primary
2. secondary
3. tertiary

Question 6

What happens in the primary sector?

Answer 6

raw materials are extracted from the Earth e.g coal or fish

Question 7

What happens in the secondary sector?

Answer 7

raw materials are taken and turned into finished goods/services

Question 8

What happens in the tertiary sector?

Answer 8

this involves providing services to consumers

Question 9

What is a good?

Answer 9

an item that can be manufactured and sold

Question 10

What is a service?

Answer 10

intangible goods that people can consume

Question 11

What is a market?

Answer 11

a place where buyers and sellers can trage goods

Question 12

What is a product market?

Answer 12

a place where goods/services can be bought and sold

Question 13

what happens to the price of a product if the demand rises in a product market

Answer 13

the price of the product rises

Question 14

Give 2 examples of a product market

Answer 14

1. supermarket
2. amazon

Question 15

What is a factor market?

Answer 15

a place where the factors of production are bought and sold

Question 16

Give 2 examples of a factor market

Answer 16

1. labour market
2. capital market

Question 17

What increases demand in the factor market?

Answer 17

demand for the product they produce

Question 18

What are 3 benefits of the product market?

Answer 18

1. firms can develop a degree of brand loyalty
2. concentration on product markets allows small firms to benefit from economies of scale
3. prices are determined by demand and supply which avoids misallocation of resources

Question 19

What are 4 limitations of the product markets?

Answer 19

1. firms can gain monopoly power
2. some products may be harmful
3. can create social costs e.g driving creates polution
4. inequality regarding price