The Basic Economic Problem

Question 1

Economic problem

Answer 1

The problem of making choices that occurs because of unlimited wants and limited resources due to scarcity

Question 2

PPC

Answer 2

Line that shows maximum amount of G + S that can be produced from the given amount of factor of production

Question 3

Factor mobility

Answer 3

Refers to the ease which which resources or FOP can be moved from one productive activity to another without incurring significant costs or a loss of output

Question 4

Opportunity cost

Answer 4

Real cost of making choices in term of next best alternative foregone

Question 5

Good

Answer 5

Tangible or visible items that satisfy human wants & need

Question 6

Services

Answer 6

Intangible or invisible items that satisfy human wants and need

Question 7

Free goods

Answer 7

Goods which the quantities are enough to satisfy all people’s wants. People do not want more or not willing to pay

Question 8

Economic goods

Answer 8

Goods which the quantities are not enough to satisfy all people wants. People needs to pay to get them

Question 9

Shortage

Answer 9

Demand exceeding supply

Question 10

Surplus

Answer 10

Supply exceeding demand