Scarcity and Choice

Question 1

The 4 factors of production

Answer 1

Land, labour, capital, enterprise

Question 2

What is economics?

Answer 2

Economics is the study of how people, businesses and governments who have limited resources (for example money), make choices and decisions to meet their needs.

Question 3

What is economic resources.

Answer 3

are the factors (things) used to produce and distribute goods and services to businesses and people.

Question 4

Needs and Wants

Answer 4

A need is something that is essential for survival e.g food, water, shelter.
A want is anything that we would like to have but we do not need to survive e.g a holiday, a trip to the cinema.

Question 5

Opportunity cost and Financial cost

Answer 5

An opportunity cost is the item you do not buy in order to buy another item.
The financial cost is the price of the item you choose to buy.

Question 6

Factors of Production

Answer 6

The Factors of Production are the economic resources needed to produce goods and services.
Land
Labour
Capital
Entrepreneurship

Question 7

The 4 factors of production and their rewards

Answer 7

Land: Reward = Rent
Labour: Reward = Wages
Capital: Reward = Interest
Enterprise: Reward = Profit