THEME 1 Chapter 1- Economic Problem

Question 1

Opportunity cost

Answer 1

The “next best” alternative that one makes

Question 2

Factors of production

Answer 2

Capital
Enterprise
Land
Labour

Question 3

When there’s not enough goods to satisfy everyone’s wants you should decide….

Answer 3

What to produce

How to produce it

Who to produce it for

Question 4

What are all the factors of production?

Answer 4

Scarce resources

Question 5

The free market means…

Answer 5

Free from any government intervention in resource allocation.

Question 6

What are the economists called who advocate the free market as a solution to the economic problem?

Answer 6

‘Classical economists’
‘Laissez faire’
‘Liberal’

This dogma is associated with the right wing politics.

Question 7

What economy does the uk have?

Answer 7

The U.K. has a mixed economy meaning that the government intervene in certain markets for many reasons

Question 8

Trade off

Answer 8

Making a choice means giving up the “next best” alternative