TERM 1 REVISION Flashcards
Explain the economic problem
unlimited wants and needs but limited resources
Economics is the study of:
the study of how society uses its limited resources
The 4 factors of production are
land, labour, capital, enterprise
The law of demand states that:
as price increases, quantity demand increases
The law of supply states that:
as price increases, quantity supplied decreases
Which of the follwoing is an example of a need rather than a want
a. apple juice
b. water
c. lemonade
d. coke
Equilibrium is…
when demand and supply are balanced and equal to eacch other
Explain capital
Physical, human made, tractor for crops, human knowledge and skill
Explain land
natural resources, fertile land, oil, water, timber, the land where factories or stores are
Explain labour
workers, physical effort, nurse, dentist, mechanic to provide service
Explain enterprise
launching + running the buisness, new ideas, profit, new markets, new industries
Who is involved in the market system?
consumers, producers, labour
draw the 2-sector circular flow module in your book
Draw the 3-sector circular flow module in your book
what is the market mechanism?
the means why which decisions of consumers and producers interact to determind the allocation of resources
