Unit 1 Definitions

Question 1

The Basic Economic Problem

Answer 1

How best to allocate scarce resources in order to satisfy peoples unlimited needs and wants

Question 2

Economic Agents

Answer 2

Individuals or households
Firms
Government

Question 3

Private Sector (Definition and Goal)

Answer 3

The economic activity of private individuals or firms. The main aim is to earn profit for its owner

Question 4

Public Sector (Definition and Goal)

Answer 4

The economic activity directly involving the government. The main aim is to provide a service

Question 5

Economic Good

Answer 5

A good or service in limited supply

Question 6

Free Good

Answer 6

A good or service in unlimited supply

Question 7

Factors Of Production

Answer 7

Land, Labour, Capital, Enterprise

Question 8

Geographical Mobility

Answer 8

The willingness and ability of a person to relocate from one area to another for employment puposes

Question 9

Occupational Mobility

Answer 9

The ease of which a person is able to change between jobs

Question 10

Opportunity Cost

Answer 10

The loss of the next best alternative when a decision is made

Question 11

Production Possibility Curve

Answer 11

Shows the maximum combination of any two categories of goods and services that can be produced in an economy, the productive capacity