Scarcity, choice and allocation of resources

Question 1

Finite

Answer 1

Non renewable- cannot be replaced once used e.g. oil, coal, zinc, lithium

Question 2

Renewable

Answer 2

Can (with careful management) be renewed as it is used e.g. hydropower, solar energy, wind energy

Question 3

Main participant/agents in the economy

Answer 3

Government
Producers
Consumers

Question 4

Government

Answer 4

They set rules that other participants have to follow

Question 5

Producers (firms)

Answer 5

Those who make the goods and services

Question 6

Consumers

Answer 6

People who buys goods/services

Question 7

How does the government handle scarcity

Answer 7

The government needs to decide how to allocate limited funds

Question 8

How do firms handle scarcity

Answer 8

A firm needs to allocate its limited workforce to different projects

Question 9

Opportunity costs

Answer 9

The next best alternative that is given up

Question 10

Opportunity costs of war

Answer 10

If government spends £700bn on a war, the OC could be that they cant spend £700bn on healthcare and education

Question 11

Opportunity costs of tax cuts

Answer 11

If government decreases income tax, OC could be that the government cannot use that revenue for some sort of government spending.