1.1 Scarcity, Choice And Potential Conflicts

Question 1

What is the problem of scarcity?

Answer 1

Unlimited wants and finite resources

Question 2

What are the four factors of production?

Answer 2

Land
Labour
Capital
Enterprise

Question 3

What are capital goods?

Answer 3

• Goods used to make consumer goods and services

- Capital inputs include fixed plant and machinery, hardware, software, factories and other buildings

Question 4

What are consumer goods?

Answer 4

-Goods which satisfy our needs and wants directly

Question 5

What is opportunity cost?

Answer 5

Measures the cost of any choice in terms of the next best alternative foregone

Question 6

What is a trade-off?

Answer 6

Arises when having more of one thing potentially results in having less of another

Question 7

What are the three main objectives?

Answer 7

Profit maximisation
Sales maximisation
Satisficing

Question 8

Name the other seven objectives

Answer 8

Survival
Market share
Cost efficiency 
Return on investment
Employee welfare
Customer satisfaction
Social objectives (CSR)

Question 9

What are economic agents?

Answer 9

Groups of people and organisations that are involved in economic activity and take decisions that affect how resources are used

Question 10

What are stakeholders?

Answer 10

Groups or individuals that are affected by and/or have an interest in the operations and objectives of the business

Question 11

List the three types of stakeholder

Answer 11

Internal
Connected
External

Question 12

What is CSR?

Answer 12

A self-regulating business model that helps a company be socially accountable, to itself, its stakeholders and the public