The Basic Economic Problem

Question 1

Need

Answer 1

Something you have to have to survive

Question 2

Want

Answer 2

Something you desire but do not need

Question 3

The basic economic problem

Answer 3

Using scarce resources to satisfy limitless needs and wants, meaning that choices need to be made about how to allocate resources efficiently

Question 3

Scarcity

Answer 3

The gap between limited resources and limitless needs and wants

Question 3

Why do economists exist?

Answer 3

to rationalise resources that are scarce and make decisions about what needs and wants should be satisfied

Question 4

Labour

Answer 4

The human input into the production process
- reward = wages

Question 5

Land

Answer 5

Natural resources including on the physical land itself and all natural resources on it
- reward = rent

Question 5

Capital

Answer 5

Human made aids to the production process
- reward = interest

Question 6

Enterprise

Answer 6

The organisation of the other factors of production
- reward = profit