The Basic Economic Problem

Question 1

Do humans have a limited set of wants or an unlimited set of wants?

Answer 1

An unlimited set of wants

Question 2

Do humans have a limited amount of resources or an unlimited amount of resources?

Answer 2

A limited amount of resources

Question 3

What is the Basic Economic Problem?

Answer 3

We have a world with infinite wants but finite resources. This is why we have prices, to allocate these finite resources

Question 4

Define Economics

Answer 4

The allocation of scarce resources to a society with infinite wants.

Question 5

What are the 4 factors of production?

Answer 5

Capital
Enterprise
Land
Labour

CELL

Question 6

What is the economic objective of a business?

Answer 6

To maximise profit

Question 7

What is the economic objective of a consumer?

Answer 7

To maximise satisfaction

Question 8

What is the economic objective of the government?

Answer 8

To maximise social output

Question 9

What is the economic objective of employees?

Answer 9

To maximise work benefits (usually financial)

Question 10

What types of economy are there?

Answer 10

State Controlled (Communism) - North Korea (closest example)
Mixed - U.K (closest example) has both a private and public sector
Free Market (Capitalism) - USA (closest example)