The Purpose and Nature of Economic Activity Flashcards

1
Q

What are needs?

A

Something that humans require to survive

e.g. food, shelter and warmth

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2
Q

What are wants?

A

Something that is not essential for survival, but what people require for better standard of living

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3
Q

Does the world have limited resources?

A

Yes

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4
Q

What happens when you satisfy need and wants?

A

You improve your economic welfare

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5
Q

What is scarcity?

A

Lack of resources

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6
Q

What is produced to satisfy needs and wants?

A

Goods and services

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7
Q

What are the key economic decisions?

A

What to produce
How to produce
Who is to benefit from the goods and services produces

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8
Q

What will economic welfare improve?

A

Economic welfare

Benefit gained by individuals, firms or society in the production of goods and services

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9
Q

What will firms combine to produce a good or service?

A

The factors of production

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10
Q

How do firms know who to produce for?

A

What is demanded

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