The Economic Problem

Question 1

Basic economic problem

Answer 1

Resources have to be allocated between competing uses because wants are infinite whilst resources are scarce

Question 2

Capital

Answer 2

The stock of manufactured resources used in the production of goods and services

Question 3

Choice

Answer 3

Economic choices involve the alternative uses of scarce resources

Question 4

Economic goods

Answer 4

Goods that are scarce because their use has an opportunity cost

Question 5

Enterprise

Answer 5

As a factor of production is the seeking out of profitable opportunities for production and taking risks in attempting to exploit these

Question 6

Fixed capital

Answer 6

Economic resources such as factories and hospitals which are used to transform working capital into goods and services

Question 7

Free goods

Answer 7

Goods that are unlimited in supply and which therefore have no opportunity cost

Question 8

Human Capital

Answer 8

The value of the productive potential of an individual or group or workers; it is made up of the skills, talents, education and training of an individual or group and represents the value of future earnings and production

Question 9

Land

Answer 9

All natural resources

Question 10

Scarce resources

Answer 10

Resources that are limited in supply so that choices have to be made about their use

Question 11

Working or circulating capital

Answer 11

Resources that in the production system waiting to be transformed into or other materials before finally being sold to the consumer