topic 1:20 intro to microeconomics

Question 1

scarcity

Answer 1

situation in which available resources or factors of production are finite compared to infinite wants, resulting in there not being enough resources to produce everything that human beings need and want.

Question 2

sustainability

Answer 2

maintaining the ability of the environment and the economy to continue to produce and satisfy needs and wants into the future.

Question 3

land

Answer 3

all natural resources, including all agricultural and non-agricultural land, and everything under or above the land.

Question 4

labour

Answer 4

physical and mental effort that people contrubute to the production of goods and services.

Question 5

capital

Answer 5

man-made factors of production used to produce final goods and services.

Question 6

entrepreneurship

Answer 6

special human skill possessed by some people, involving the ability to innovate by developing new ways of doing things, and organising the three FOP and taking on the risks/successes of a new busisness.

Question 7

opportunity cost

Answer 7

value of the next best alternative given up or sacrificed to obtain something else, as a result of scarcity.

Question 8

resource allocation

Answer 8

assigning available FOP to specific uses chosen among many possible alternatives.

Question 9

efficiency

Answer 9

fully utilising the available FOP in a manner that avoids waste, using the resources to produce the maximum quantity of finished goods.

Question 10

differing levels of government intervention

Answer 10

command approach (planned economy) vs market approach (free market economy) in between, mixed economy (combination of

Question 11

command approach to economy

Answer 11

refers to a planned economy where the FOP are under public sector resource ownership (govt) and economic decisions are made and goods are allocated by the government. rationing is based on non-price rationing functions.

Question 12

market approach to economy

Answer 12

refers to free market economy where FOP are under private sector ownership, and the goods are allocated entirely accordingly to free market forces. rationing is based on price rationing functions

Question 13

mixed economy

Answer 13

is a combination of free market allocation and government allocation of resources in an economy

Question 14

PPC

Answer 14

production possibilities curve. a model used to illustrate the relationship between FOP and two competing goods. it illustrates the concepts of scarcity, choice, opportunity cost, and efficiency

Question 15

movements along curve in FOP

Answer 15

shows changes resource allocation to produce finished g&s. due to changes in choices about how scarce resources are allocated to the production of finished g&s

Question 16

movements of the curve

Answer 16

due to chnged in the potential output of the market because of changes in the quality and qty of FOP