U3 AOS 1 Relative scarcity

Question 1

relative scarcity

Answer 1

refers to the basic economic problem that arises when our unlimited wants and needs are unable to be satisfied by our limited resources.

Question 2

Needs

Answer 2

Good or service that is necessary for one’s survival

Question 3

Wants

Answer 3

Good or service that is not necessary for one’s survival, but improves the quality of one’s life when consumed.

Question 4

economic agents

Answer 4

are the decision makers in the economy and include consumers or households, businesses or producers, governments, pressure groups including unions and the media.

Question 4

Resources

Answer 4

are productive inputs and include natural, labour and physical capital used by businesses to make other goods and services.

Question 5

Natural resources

Answer 5

are the factors of production found in nature, such as minerals, rainfall and the environment.

Question 6

labour resources .

Answer 6

used in production are physical power and mental talents provided by employees

Question 7

capital resources

Answer 7

are physical plant and equipment used by firms to help make other goods and services.

Question 8

productive capacity

Answer 8

represents the physical limit to a nation’s production level, when all resources are used as efficiently as possible to gain the highest output. It is represented by the production possibility frontier on a production possibility diagram.