Resources

Question 1

What are free goods?

Answer 1

Goods so abundant that there is NO scarcity. They have no price.

Question 2

What are economic goods?

Answer 2

They are scarce goods that have a price.

Question 3

How are economic goods allocated?

Answer 3

The price system (90%).
Rationing - vouchers.
Queuing - First in, first served.

Question 4

How do we know an Economic good is very scarce?

Answer 4

The price is high.

Question 5

What are the resources of an Economy?

Answer 5

Land, Labour, Capital, Entrepreneurship

Question 6

Define “Land”

Answer 6

Raw materials used in production and a gift of nature

Question 7

Define “Labour”

Answer 7

It is a human effort in production of goods and services

Question 8

Define “Capital”

Answer 8

Man-Made equipment used to produce goods + services

Question 9

Define “Entrepreneurship”

Answer 9

The person(s) who take the risk of organising the other factors of production to achieve a profit

Question 10

What are the other names for factors of production?

Answer 10

• Inputs

- Resources

Question 11

Define Final Goods

Answer 11

Consumer goods available for consumption

Question 12

Define Durable Consumer Goods

Answer 12

Consumer goods that last for a long time e.g Car, House. Given we look after those things.

Question 13

What are the types of production?

Answer 13

Goods - capital & consumer

Services - consumer & business

Question 14

What are Renewable Resources?

Answer 14

Replaced or replenished within 100 years. e.g. Trees

Question 15

What are positive goods?

Answer 15

Positive goods are beneficial to society e.g. Fresh Air, Medicine.

Question 16

What are negative goods?

Answer 16

Negative goods are a cost to society. E.g. Waste products that pollute rivers so the water cannot be used for drinking or sports.

Question 17

What is the payment for land?

Answer 17

Rent

Question 18

What is the payment for capital?

Answer 18

Interest

Question 19

What is the payment for labour

Answer 19

Wages

Question 20

What is the payment for entrepreneurship?

Answer 20

Profit

Question 21

What is a subsistence society?

Answer 21

A society in which everybody is independent. Working to stay at the same place as before.
No surplus.

Question 22

What is dependance?

Answer 22

You rely on yourself and do not rely on others.

Question 23

What is Specialisation?

Answer 23

Individuals concentrating on a specific task.

Question 24

What is Division of Labour?

Answer 24

Breaking down the production process into smaller tasks so a worker becomes a specialist.

Question 25

What is Division of Labour by Product?

Answer 25

Individuals concentrating on producing a specific good or service

Question 26

What is a benefit of specialisation?

Answer 26

• Gain more Means. Time & Skill.
• Higher quality goods & services more efficiently/faster. They keep getting more skilled in the certain task.
• A surplus can be created for trading.

Question 27

What is interdependence?

Answer 27

A situation in which everyone relys on each other for success/survival e.g. each person specialises in one category.

Question 28

What is dependance?

Answer 28

You rely on others and they do not rely on your e.g. baby & mother.

Question 29

What are the disadvantages of specialisation?

Answer 29

• Interdependance
• It gets boring
• Your skill may not be wanted in future.

Question 30

What is Division of Labour by Process?

Answer 30

Where individuals break down the production of a product or service into smaller tasks and specialises at that task.

Question 31

What are the advantages of Division of Labour?

Answer 31

• More efficiency
• A bigger surplus than before
• More productivity.
• Surpluses were now able to be traded. Imports/Exports.

Question 32

What is the major innovations to improve a surplus in economy?

Answer 32

• Mechanisation
• Division of Labour by Product
• Division of Labour by Process