Economics And Law Exam

Question 1

Define relative scarcity

Answer 1

We do not have enough resources to satisfy all our needs and wants

Question 2

What is a need and what is a want?

Answer 2

Needs: goods and services that are required e.g food, clothing, shelter and healthcare
Wants: goods and services that aren’t considered necessary but we desire e.g jewellery

Question 3

Factors of production

Answer 3

Land - natural resources available for production
Enterprise - the organisation
Labour - human input into production
Capital - goods used in the creation of the product

Question 4

Opportunity cost:

Answer 4

One alternative being chosen instead of another

E.g I want two items, I only have enough money for one, I will have to give up one to get the other

Question 5

PPC (production possibility curve):

Answer 5

A curve depicting all maximum output possibilities for two goods

Question 6

Microeconomics:

Answer 6

Economics concerned with individual factors and the effect of individual decisions

Question 7

Macroeconomics:

Answer 7

Deals with performance structure, behaviour, and decision making of a economy as a whole

Question 8

Define market:

Answer 8

Any structure that allows buyers and sellers to exchange goods and services and information with or without money.

Question 9

How are prices determined in a market?

Answer 9

Prices are determined in the market by how much the seller is willing to sell at a price, and how much a consumer is willing to pay

Question 10

Money as a medium of exchange:

Answer 10

Money is used to facilitate the sale, purchase or trade of goods between parties. Bartering, the previous medium of exchange, couldn’t facilitate the accumulation of wealth, so it was discarded.

• gets rid of double coincidence
• has no value outside of its country of origin

Question 11

Functions of money:

Answer 11

• Medium of exchange
• store of value
• facilitates trade
• allows for the accumulation of wealth

Question 12

Law of DMU (diminishing marginal utility):

Answer 12

The law of DMU states that the more we consume a product, the less satisfaction we get from it. Initially when we first get something we enjoy it the most. However over time we enjoy it less and less

Question 13

Barter system:

Answer 13

The barter system facilitates fair trade. Where people exchange goods and services for other goods and services in return
A: flexible
D: no consumer protection

Question 14

Legal and non-legal rules:

Answer 14

Legal rules: have to be followed by everyone that is a resident of the country
Non-legal rules: rules that you have to follow if you are part of a particular group or association

Question 15

What is the need for rules?

Answer 15

societies use rules to regulate unwanted or harmful behavior and to encourage wanted or beneficial behavior of individual society members

Question 16

What is the need for laws, and features of an effective law?

Answer 16

Laws provide a guide to acceptable behaviour, resolve conflict and protect human rights. Effective laws need to be transparent, known by the public, fair, enforceable and stable

Question 17

What’s the difference between moral and social values?

Answer 17

Social values are based on your perception of what you believe to be important to better your community, city, state, nation etc.
Moral values are based on your perception of what you believe to be important to be a righteous person, or have an upstanding family, etc.

Question 18

Criminal law

Answer 18

When something unlawful is done against the state, person, or property and police are involved. E.g murder, rape, manslaughter

Question 19

Civil law

Answer 19

When something that is against the rules of society is done but police is involved. E.g parking in a no parking spot