The nature and purpose of economics

Question 1

What is the central purpose of economic activity?

Answer 1

The central purpose of economic activity is to produce goods and services to satisfy the unlimited needs and wants of individuals, using scarce resources efficiently.

Question 2

What are the three key economic decisions?

Answer 2

1. What to produce
2. How to produce
3. Who benefits from the goods and services produced

Question 3

What are the four factors of production?

Answer 3

Land, labour, capital, and enterprise.

Question 4

What is meant by “land” in economics?

Answer 4

“Land” refers to all natural resources used in production, including physical land and resources like minerals, water, and forests.