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Economics > Unit 1: the basic economic problem > Flashcards

Unit 1: the basic economic problem Flashcards

1
Q

What is the basic economic problem

A

there’s unlimited want and limited resources to fulfill these wants.

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2
Q

What are economic goods

A

goods that are produced with resources, thus limited in supply and have a opportunity cost

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3
Q

What are free goods

A

a product that doesn’t require any resources to make and don’t have a opportunity cost

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4
Q

What is opportunity cost

A

the best forgone alternative

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5
Q

What is factors of production

A

economic resources that are used to produce goods and services

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6
Q

What are the 4 factors of production

A

land, labour, capital, and enterprise

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7
Q

What is land in economics

A

any natural resource used in production including coal, fish, e.t.c

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8
Q

What is labour

A

covers any human labour, including mental and physical effort. A bank manager and shein factory worker are all labour.

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9
Q

What is human capital

A

not labour it refers to the education, training, and experiences that enhance the ability for workers to produce

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10
Q

What is capital

A

any manufacted meaning human made good that is used to produce other goods. This includes offices, railways, e.t.c.

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11
Q

What is a capital good

A

a good not wanted for their own sake but what they can produce

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12
Q

what is a consumer good

A

are wanted for the satisfaction they can provide

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13
Q
A
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14
Q

Is land mobile

A

occupationally yes, the same piece of land can be used for different purposes, but geographically not so much.

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15
Q

Is labour mobile

A

It depends on factors such as

lack of information
restrictions on movements of workers
lack of appropriate skills and qualificaitons
family ties
differences in pricing and housing

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16
Q

is capital mobile

A

depending on the type of capital good, a screw driver is mobile but a factory is not. A building is occupationally mobile but not a robot who screws caps on.

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17
Q

Is enterprise mobile

A

it’s the most mobile FOP, the skills of an entrepaneur can be applied in any industry and they can theoretically work in any country.

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18
Q

Does quanitity of land FOP change

A

yes, for example forests are decreasing at fast amount, soil erosions, but some resources are renewable.

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19
Q

Can quality of land FOP change

A

yes, pollution may cause it become worse or fertilizer may cause it to become better.

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20
Q

Can quantity of labour change

A

yes it depends on the size of the population the larger it is the more labour

the age structure a country with a highererporportion of people of working age will have more labour

the retirment age the higher it is the more labour is available

lowering school leaving age increases labour

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21
Q

Can quality of labour change

A

better education, training, experience, and health care increase quality as they’re more prepared to carry out difficult tasks,.

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22
Q

Can quanity of capital change

A

yes and it’s influenced by investment. Each year there will be capital goods that physically wear out, and newer capital goods will replace it. The total spending on capital goods in gross investment. The value of capital goods that are worn out are depreicant. Net investment is the value of extra capital goods made, it’s gross investment minus depreiation/

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23
Q

Can quality of capital chagne

A

yes if technology advances capital goods produce more and higher quality.

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24
Q

Can quantity of enterprise chagne

A

yes a good education system can develop them, a lower tax on firm profits, and reduction in government regulations

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25
Q

Can quality of enterprise cahgne

A

yes same cocnept as labour if they recieve better education, training, experience, or health care they will increase in quality. More experience is significant as the knowledge and understanding they gain help them make a better business.

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26
Q

How are FOP payed

A

firms/businesses pay wages to labour for their service. eneterpaneurs for bearing risks and organizing other fops earn profit. Land recieves rent and interest is the payment for capital

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27
Q

What are needs

A

Things necessary for survival

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28
Q

What are wants

A

Things not necessary for survival

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29
Q

What’s scarcity

A

the limitation of resources such as land, capital, labour, and entrepeanurship

30
Q

Difference between scarcity and shortage

A

Shortage is referring to quantity demanded is larger than quantity supplied. Whereas shortage focuses on limitations of resources.

31
Q

What are economic agents

A

People has an influence on the economy by producing, buying, or selling meaning they’re decision makers

32
Q

Examples of economic agents

A

households, firms, and government

33
Q

How is land resources paid

A

In rent to whom the owner is

34
Q

How is labour resources paid

A

wages and salaries

35
Q

How is capital resources paid

A

interest paid to providers of capital

36
Q

How is entrepeneur resources paid

A

profit

37
Q

Data response question answers

A

First is a calculation question, then identiy and state whatever they ask you for the 2 marker. The next two marker you must explain 2 clear and distinct reason why. For the 4 marker there should be a 2 paragraph answer each paragraph having a how and why. For the next 4 marker draw, label the axis, shift curve, remiemeber to note down the equilibriums

38
Q

How to answer question words starting with discuss

A

To write two sided answer with depth and strong links in analysis. With a evaluation

39
Q

How to answer analyse questions

A

state the relationship, add supporting evidence.

39
Q

How to answer explain

A

Wirte the purposes and reasons explicitly state their relationship

40
Q

How to answer questions starting with describe

A

the characteristics or main features of it

41
Q

What is a PPC

A

Production possibility curvce

42
Q

What does a PPC show

A

shows the different combinations of two goods that can be produced given a full employment of resources

43
Q

How does PPC show scarcity

A

you can’t produce beyond the curve

44
Q

How does the PPC show tradeoffs

A

be as you increase production of one produce the other product must decrease in production

45
Q

How are opportunity costs show in production possibility curves

A

the products you give up to make more of another produce

46
Q

where are effeciient combos in PPC

A

on the curve

47
Q

When are PPC curves straight

A

When the two products are similar, thus having similar resources needed to be produced, the straight PPC curve signifying a constant opportunity cost

48
Q

Why are most ppc curves curves

A

There’s an increasing opportunity cost between the two products. THis is due to the fact the resources required for both products are different, at first the resrouces used will be the ones that are most suited for one of the product.

49
Q

What’s the law of increasing opportunity cost

A

when all resources are being used, an increase. inteh production of one good there will be a higher opportunity cost of the other good

50
Q

What does the PPC assume

A

only twoo good are produced, the quantity and quality. ofresources available is fxed and the state of technology remians unchanged

51
Q

Reasons why the PPC shifts

A

Change in quanitty. orquality of resources or advances in technology,

52
Q

Consumer goods

A

wanted for. thesatisfaction they provide the consumer

53
Q

capital good

A

wanted for their ability to create another g/s

54
Q

What’s human capital

A

the training, experience, and skills workers gain

55
Q

What’s a economy

A

a system of activities including production, consumption, and exchange of goods and services on a loca, national, or global scale

56
Q

What’s the economic system

A

what g/s should be produced, how will it be produced, and who can biy the g/s

57
Q

What are g/s

A

goods and services, goods being physical products we consume, services are activites provided

58
Q

How are the three main economic systems difefernt

A

based on how they answer the questions of what to produce, how to produce it, and who recives it

59
Q

Properties of planned economy

A

owned by the government, regulated by the government, and prices of g/s are controlled

60
Q

Properties of free marker

A

firms are owned by private sectors, there’s a freedom to start businesses, and prices are determined by supply and demand

61
Q

What’s the private sector

A

private individuals and businesses. the main objective being to make profit

62
Q

the public sector

A

a countries economic sector that’s run and controlled by the government

63
Q

How do private sectors make money

A

they earn our money through provding us goods and services we want or neeed

64
Q

How does competition aid consumers

A

it keeps prices equal around every store and low

65
Q

How is the public sector funded

A

using our tax money, no competiton as no matter what we fund it. Government decideds on how large or little the funding is

66
Q

Proper way to answer a two mark questions

A

use full terminology, and provid two sentences

67
Q

Private sector and public sector comparisons

A

the private sector is more efficient having better quality of products and customar service as theyc ould be closed down without consumers.

68
Q

Proepr way to anwer a 4 mark question

A

provid two points and two explanations one each paragraph usually 4-6 sentences

69
Q

how to answer 6 mark question

A

look at the command word, if it says analyse provide 3 paragraphs on epoint one explanation, if it asks to draw a diagram draw a fully labelled diagram and then a explanation. Finally discuss, whether or whether or not provide two points with explanations for one side and a point with explanation from the other side of the argument. there’s no need for a conclusion

Economics (5 decks)

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