The Purpose and Nature of Economic Activity Flashcards
What are needs?
Something that humans require to survive
e.g. food, shelter and warmth
What are wants?
Something that is not essential for survival, but what people require for better standard of living
Does the world have limited resources?
Yes
What happens when you satisfy need and wants?
You improve your economic welfare
What is scarcity?
Lack of resources
What is produced to satisfy needs and wants?
Goods and services
What are the key economic decisions?
What to produce
How to produce
Who is to benefit from the goods and services produces
What will economic welfare improve?
Economic welfare
Benefit gained by individuals, firms or society in the production of goods and services
What will firms combine to produce a good or service?
The factors of production
How do firms know who to produce for?
What is demanded