Resources

Question 1

How Are Scarce Resources Allocated?

Answer 1

The price system, rationing - via vouchers, queuing system - first in first served.

Question 2

What Are Free Goods?

Answer 2

Goods so abundant that there is no price. There is no opportunity cost to it.

Question 3

What Are Economic Goods?

Answer 3

Scarce goods that are allocated by the price system or rationing or queuing.

Question 4

What Happens If Goods Are Really Scarce?

Answer 4

The price rises.

Question 5

What Are The Resources?

Answer 5

Land, labour, capital, entrepreneurship.

Question 6

Define Land.

Answer 6

Raw materials supplied by nature. E.g. forests, minerals, fishing grounds etc.

Question 7

Define Labour.

Answer 7

Human resources or human effect.

Question 8

Define Capital.

Answer 8

Man made resources to assist production. E.g. sewing machines, hammers, tractors etc.

Question 9

Define Entrepreneurship.

Answer 9

The person who takes the RISK of organizing the other feature of production to achieve a profit from production.

Question 10

What Are Other Names For Resources?

Answer 10

Factors of production or inputs to production.

Question 11

What Types Of Production Are There?

Answer 11

Goods and services.

Question 12

What Types Of Goods Are There?

Answer 12

Consumer goods and capital goods.

Question 13

What Type Of Consumer Goods Are There?

Answer 13

Durable goods, which are renewable goods such as a television, and non durable goods are goods that are non-renewable such as food.

Question 14

Define Consumer Goods.

Answer 14

Goods to assist consumer’s satisfaction for their needs and wants.

Question 15

What Are Natural Resources?

Answer 15

Natural resources that will replenish in 100 years.

Question 16

What Are Non-Renewable Resources?

Answer 16

Natural resources that will not replenish when used. E.g. oil, coal, gold.

Question 17

An Example Of Factors Of Production.

Answer 17

To produce wine, you would need a vineyard, which is land, pickers and packers, which is labour, machines to produce wine, which is capital and the wine maker or seller, which is the entrepreneurship.

Question 18

What Are Goods?

Answer 18

Goods are things you could touch, they are tangible. E.g. cars and televisions etc.

Question 19

What Are Services?

Answer 19

Services are things that are done for you, they are intangible. E.g. getting a haircut or getting a bus ride etc.

Question 20

What Is The Payment For Land?

Answer 20

Rent.

Question 21

What Is The Payment For Labour?

Answer 21

Wages.

Question 22

What Is The Payment For Capital?

Answer 22

Interest.

Question 23

What Is The Payment For Entrepreneur?

Answer 23

Profit.

Question 24

What Is A Positive Good?

Answer 24

Positive goods are beneficial to the society. E.g. medicine etc.

Question 25

What Is A Negative Good?

Answer 25

Negative goods are costly to the society. E.g. pollution, cigarettes etc.

Question 26

What Is Interdependent?

Answer 26

When we rely on someone and that rely on you to get your needs and wants.

Question 27

What Is A Subsistence Economy?

Answer 27

Everybody works independently just to maintain their current living standards. There is no surplus produced.

Question 28

What Is Independent?

Answer 28

You rely on yourself for needs and wants. You do not rely on others.

Question 29

What Is Specialization?

Answer 29

Individuals concentrating on one task to improve productivity and efficiency.

Question 30

What Is Division Of Labour?

Answer 30

Breaking down the production process into small tasks.

Question 31

What Is Division Of Labour By Product?

Answer 31

Breaking the labour to concentrate on one specific type of production. E.g. Fishing, farming, construction.

Question 32

What Is The Benefit Of Division Of Labour?

Answer 32

More goods and services, higher production efficiency, better quality and greater surplus.

Question 33

What Methods Can Producers Use To Increase Surplus Of Production?

Answer 33

• Division of labour by product.
• Division of labour by process.
• Mechanization.

Question 34

What Is A Disadvantage Of Specialization?

Answer 34

• You become interdependent.

- It can be boring or repetitive.

Question 35

What Is Dependence?

Answer 35

When you are reliant on others for your needs and wants but they do not rely on you. E.g. baby and mother.