Chapter 1

Question 1

Need

Answer 1

A good or service essential for living.

Question 2

A want

Answer 2

A good or service that people would like to have, but which is not essential for living

Question 3

Economic problem

Answer 3

Unlimited wants but limited resources - this creates scarcity.

Question 4

Scarcity

Answer 4

Lack of sufficient products to satisfy total wants of population

Question 5

Opportunity Cost

Answer 5

The next best item given up by choosing another.

Question 6

Factors of production

Answer 6

Resources needed to produce goods and services

Question 7

Name 4 factors of production

Answer 7

land, labour, capital and enterprise.

Question 8

Business

Answer 8

An organisation that combines factors of production to make goods and services to
satisfy people’s wants and needs.

Question 9

Specialisation

Answer 9

People and businesses concentrate on what they are best at.

Question 10

Division of labour

Answer 10

Production is split into separate tasks and each worker specialises in one task.

Question 11

Added value

Answer 11

The difference between a product’s selling price and the cost of bought in materials.