Topic 1: scarcity

Question 0

Resources of a country factors of production (4)

Answer 0

Land
Labour
Capital (assets)
Enterprise

Question 1

Scarcity

Answer 1

Is the fundamental economic problem. We are forced to make decisions to allocate recourses efficiently because people have unlimited wants but resources are limited

Question 2

Land

Answer 2

The world has a scarce amount of land. We cannon increase the amount of land available.
-includes all natural resources, raw materials, fertility of soil and resources found in the sea, renewable resources, non-renewable

Question 3

Labour

Answer 3

Refers to those people involved in the production of goods and services
Limited amount of people available for work

Question 4

Capital (assets)

Answer 4

Any man maid aids to production, including factory building, offices, machinery and it equipment which are used to make other goods and services

Question 5

Basic economic problem

Answer 5

Resources are scarce but wants are unlimited

Question 6

What does DER stand for

Answer 6

Define
Explain
Reject

Question 7

Non-renewable

Examples

Answer 7

Non-renewable resources are ones whose stock level decreases over time as it is consumed.

Fossil fuels, oil

Question 8

Examples of non-renewable resources

What reduces the rate of decline of non-renewables

Answer 8

Fossil fuels (oil, gas and coal) 
Commodities(gold and aluminium) 

Recycling or developing alternative resources

Question 9

Renewable resources

Examples

Answer 9

One whose stock levels can be maintained over a period of time. Renewables will run out if they are being consumed quicker then replenished

Solar energy, wind power, wood, fish

Question 10

Sustainable resources

Answer 10

Type of renewables. Sustainable resources are used at the same (or slower) speed than it is renewed,

A forest that is chopped down is no longer a sustainable resource

Question 11

Enterprise

Answer 11

The entrepreneur performs 2 essential functions:

• bringing together the other factors of production so that goods and services can be produced
• taking the risks involved in production

Question 12

Consumer goods

Examples

Answer 12

Those which give satisfaction to consumers
Consumer goods: e.g iPhones or cars

Consumer services: car repairs, IT services or foreign holidays

Question 13

Capital goods

Answer 13

Those required to produce other goods both capital goods and consumer goods.
Example capital goods: machinery and factory building

Example of capital services: finance companies offering loans to business and companies which repair machinery

Question 14

How should goods and services be produced?

Production may be:

• Labour intensive
• capital intensive

Answer 14

Labour intensive: high proportion of labour used relative to capital

Capital intensive: high proportion of capital used relative to labour

Question 15

How should the goods produced be allocated

• the free market economy
• the command or centrally planned economy

Answer 15

• where answers are determined by market forces

- where answers are determined by the state

Question 16

Sustainable development

Answer 16

Meeting the needs of the present without compromising the ability of the future generation to meet their own needs