The Economic problem

Question 1

What do people buy products for

Answer 1

Utility

Question 2

Define utility

Answer 2

the pleasure/happiness a product brings

Question 3

What is a scarce resource

Answer 3

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

Question 3

What are renewable resources and give examples

Answer 3

Resources which can be exploited many times because they have the potential to renew themselves
-fish stocks
-forests (timber)

Question 3

Describe the economic problem

Answer 3

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

Question 4

What are non renewable resources and give examples

Answer 4

Resources which once exploited cannot be replaced
-coal
-oil

Question 5

What are sustainable resources

Answer 5

Renewable resource which is being economically exploited so it will not run out

Question 6

Define oppurtunity cost

Answer 6

The sacrifice when the next best alternative is forgone

Question 7

What is an economy

Answer 7

Any type of system that tries to solve the economic problem

Question 8

What are the 4 factors of production and describe them

Answer 8

Land-the physical place where the business operates and the NATURAL RESOURCES that go into production

Labour-the workforce used to provide goods and services

Capital-refers to the money required for machinery,furniture etc.

Enterprise-refers to those with the aim of being an entrepreneur and making a profit for the business