Economice

Question 1

What is the definition of economics

Answer 1

The study of how we allocate our scarce resources

Question 2

Definition of scarcity

Answer 2

It is the problem of having unlimited needs and wants but limited resources

Question 3

Land

Answer 3

Any natural resource used in the production of a good or service e.g. land, cattle and water

Question 4

Labour

Answer 4

Any people used in the production of a good or service e.g. factory worker, baker and policeman

Question 5

Capital

Answer 5

Any man-made item used in the production of a good or service e.g. computer, tractor and machinery

Question 6

Enterprise

Answer 6

A person who brings the factors of production together e.g. CEO, and business

Question 7

Economic problem

Answer 7

The society has unlimited wants but limited resources

Question 8

Opportunity cost

Answer 8

The value of the alternative given up when a choice is made

Question 9

Making choices

Answer 9

As consumers we make choices about what we want to buy to satisfy our needs and wants

Question 10

Specialisation and trade

Answer 10

When a country is unable to produce a good or service, it can rely on trade, or the ability to import or export goods or resources to or from another country

Question 11

Interdependence

Answer 11

This is the way we rely on others to satisfy our wants and needs

Question 12

Allocation and markets

Answer 12

This is the way we distribute our scarce resources among producers

Question 13

Economic performance and living standards

Answer 13

This measures how well an economy is doing, known as its economic performance, using a wide variety of methods

Question 14

Demand

Answer 14

Demand is the quantity of a product that consumers are willing to purchase at a particular price at a given point in time

Question 15

Supply

Answer 15

Supply refers to the quantity of a good or service that businesses are willing and able to for sale at a given price, at a given point in time

Question 16

Law of demand

Answer 16

The higher the price of the good or service, lower the quantity demanded by consumers .

Question 17

Law of supply

Answer 17

The higher the price of the good or service, the more producers are willing to sell

Question 18

Needs

Answer 18

Needs are those goods and services that we depend on for survival

Question 19

Wants

Answer 19

Wants are the goods and services that we can live without, but are nice to have

Question 20

Market economies

Answer 20

economies that rely on markets to decide how to allocate resources, goods and services are called ‘market economies’

Question 21

Equilibrium price

Answer 21

This is when the supply curve and the demand curve meet and it gives a good price

Question 22

Pricing strategies

Answer 22

Cost plus margin, economy pricing, penetration pricing, premium pricing, psychological pricing.

Question 23

4 functions of money

Answer 23

Medium exchange, measure of value, store of value, standard of deferred payments