theme 1.1

Question 1

what is the economic problem ?

Answer 1

we have unlimited wants but a limited amount of resources

Question 2

what is scarcity ?

Answer 2

When we lack something

Question 3

What is an opportunity cost ?

Answer 3

the next best option when we make a decision

Question 4

What is a trade off

Answer 4

when you choose one thing which causes you to sacrifice another

Question 5

What are the 3 scarcity choices

Answer 5

What to produce ?
How to produce it ?
For whom ?

Question 6

What is business objective

Answer 6

goals that a company aims to achieve

Question 7

What are 3 financial objectives ?

Answer 7

Profit maximisation
Profit satisficing
Cost minimisation

Question 8

What are 2 non financial objectives ?

Answer 8

Social objectives
Customer satisfaction

Question 9

What is profit satisficing ?

Answer 9

Making a bare minimum to satisfy the firm and stakeholders

Question 10

What is employee welfare ?

Answer 10

making employees feel valued and appreciated

Question 11

What is cost efficiency ?

Answer 11

Creating a product with least amount of money while maintaining standards

Question 12

What is an economic agent ?

Answer 12

individuals,firms or governments that partake in economic activity

Question 13

What is the benefit of stake holder mapping ?

Answer 13

All stakeholders are considered and helps reduce conflict

Question 14

what is the

Question 15

what is an entrepreneur?

Answer 15

organises the factories of production in order to add value and make a profit

Question 16

what is the principal agent problem

Answer 16

where the owner (principal) and the person hired (agent) have differences based on interests

Question 17

what is csr

Answer 17

creative social responsibility is a form of regulation for a frm to think about how their actions affect society

Question 18

how do firms achieve csr

Answer 18

refuse to use cheap labour
charity donations
reducing carbon emissions

Question 19

what is the dilema with csr

Answer 19

arises when whta is profitable is not necessarily the most profitable

Question 20

what problem may occur with csr

Answer 20

consumers may not have affordable clothes as company markups are higher due to high cost of sales

Question 21

what is creative destruction

Answer 21

continued innovation of products and service to replace outdated ones

Question 22

what are the 2 ways creative destruction happen

Answer 22

technology - continued innovation
trade- trading across countries reduce needs for domestic jobs

Question 23

what are the pros of creative destruction

Answer 23

create new industries
lead to economic growth and innovation
more employment
encourages competition

Question 24

what are the cons of creative destruction

Answer 24

can cause structural unemployment

Question 25

what is structural unemployment

Answer 25

the idea that when an industry becomes obsolete the workers do not possess skills needed in another industry

Question 26

what is added value

Answer 26

a firm’s input into a product to make it more worth buying