Basic Economic Problem

Question 1

define the nature of the economic problem

Answer 1

our factors of production are scarce and there are limited resources but unlimited wants. needs might be satisfied but wants may never be. the costumer will have to take into account opportunity cost.

Question 2

what are the factors of production?

Answer 2

• land
• labour
• capital
• enterprise

Question 3

what is land

Answer 3

natural resources e.g. farmland

Question 4

what is labour

Answer 4

all physical and mental effort of workers e.g. teacher

Question 5

what is capital

Answer 5

all man-made goods used in production e.g. machinery

Question 6

what is enterprise

Answer 6

the risk bearing and decision making function e.g. entrepreneur or even. g. Richard Branson