The Nature And Purpose Of Economic Activity

Question 1

What is an economy

Answer 1

any system that tries to solve the economic problem or the problem of scarcity.

Question 2

State the central purpose of economic activity

Answer 2

the production of goods and services to satisfy needs and wants.

Question 3

There are three key economic decisions which can help in solving the economic problem, state them

Answer 3

economists need to answer three key questions:

1. What do we produce? - we can use our resources to produce many things such as new schools or parks
2. How do we produce this stuff? - do we produce in the UK or elsewhere, do we make it with titanium or another material
3. For Whom are we making this stuff for? - who gets to use it