The Economic Problem (LS1)

Question 1

Economy

Answer 1

Goods and service produced in an area.

Question 2

4 factors of production

Answer 2

Capital, enterprise, land, labour

Question 3

Capital

Answer 3

Things used to make goods and services (machinery)

Question 4

Enterprise

Answer 4

Willingness of people to take risks to make a profit

Question 5

Land

Answer 5

Natural resources like forests

Question 6

Labour

Answer 6

Work done by humans in production

Question 7

Economic problem: how to use available scarce resources to satisfy people’s infinite needs as effectively as possible.

3 key questions:

Answer 7

What to produce
How to produce it
Who to produce it for

Question 8

Economic agents

Answer 8

Groups that participate in the economy.

Producers, consumers, firms and the government

Question 9

Producers

Answer 9

Create goods and services

Question 10

Firms

Answer 10

Businesses

Question 11

Consumers

Answer 11

Buyers of goods and services made my firms

Question 12

Government

Answer 12

Sets the rules that other economic agents must follow as well as making some goods and services like roads and health care