Main Economic groups and factors of production + The basic economic problem

Question 1

What is a consumer?

Answer 1

A person or organization that directly uses a good or service.

Question 2

What are goods?

Answer 2

Something you can purchase like shoes. A tangible product like something you can touch.

Question 3

What is the government?

Answer 3

They make and enforce rules within the country they support. Some of these rules will directly affect consumers and producers.

Question 4

What are services?

Answer 4

An intangible product, a product that cannot be seen or touched. Like a car wash, hairdressers, nail clippers, or barbers.

Question 5

What is production?

Answer 5

The total output of goods and services produced by a firm or industry in a time period.

Question 6

How are Consumers and producers related?

Answer 6

The consumers pay for the goods and services. Firms employ consumers and provide wages. These wages will pay for goods and services.

Question 7

How are the Government and producers related?

Answer 7

The government may buy goods and services from producers. Government sets producers and tax rates. It may subside the producers/ industries it wants to encourage.

Question 8

How are the Government and consumers related?

Answer 8

Government taxes consumers and provides services. Government sets and enforces laws on how society should function and provide welfare.

Question 9

What are the factors of production (hint: use the acronym cell)

Answer 9

C apital

E nterprise

L and

L abour

Question 10

What does Land refer to in FOP’s?

State examples:

Answer 10

Land refers to the natural resources of an economy

Eg Farmland, mineral deposits, oil, coal etc..

Question 11

What doe Labour refer to in FOP’s?

State examples:

Answer 11

Labour refers to the human resources of an economy in terms of physical and mental labour

Mental labour: doctor, teacher

Physical labour: Builder, Construction worker

Question 12

What does Labour depend on (what can change it?)?

Answer 12

Labour depends on the size of the population, the impact of migration and the working age within a country. It is also affected by the quality of labour, so the extent of education

Question 13

What does Capital refer to in FOP’s?

State examples:

Answer 13

Capital refers to the human-made aids of production It includes artificial resources that are inputs used to produce more goods and services.

Examples include machinery tools, factory, buildings, transport such as freight lorries, and items of technology used during the production process.

Question 14

What does Enterprise refer to in FOP’s?

State an example:

Answer 14

Enterprise in when the other factors of production are organised to make goods and services. (Could also be the risk/idea into gathering all the other fop’s to create the final goods and services.

Examples could be the start of Facebook/ the risks involved in making it

Question 15

What is the basic economic problem?

Answer 15

How to best use limited resources to satisfy the unlimited wants of people

Question 16

What are scarce resources?

Answer 16

Scarce resources are where there are fewer things to make goods and services than are desired. (Limited, finite and insufficient)

Question 17

What are unlimited wants?

Answer 17

Unlimited wants (or infinite wants) mean the desire for anything a consumer would like, whether or not they have the resources to purchase it. (The infinite desire for something)

Question 18

Is a good a tangible or intangible good?

Answer 18

Tangible, can be touched

Question 19

Is a service a tangible or intangible good?

Answer 19

Intangible good, can’t be physically touched

Question 20

What is opportunity cost?

Write out one example of opportunity cost during your trip to school:

Answer 20

Opportunity cost is something that is given up when making a decision on the use of scarce resources.

Question 21

What is economic sustainability?

Answer 21

Economic sustainability is the best use of resources in order to creates responsible development or growth, now and into the future

Question 22

What is the definition of the primary sector?

Answer 22

Where the extraction of raw materials takes place

Question 23

What is the definition of the secondary sector?

Answer 23

Is the manufacturing of goods and services by the resources extracted from the primary sector

Question 24

What is social sustainability and what are the factors?

Answer 24

Social sustainability is the impact of development or growth that promotes an improvement in quality of life for all, now and into the future.

• Health and wellbeing
• Air pollution
• Living standards

Question 25

What is an economic choice?

Answer 25

An economic choice is an option for the use of selected scarce materials

Question 26

What is environmental sustainability?

Answer 26

Environmental sustainability is the impact of development or growth where the effect on the environment in small and possible to manage, now and into the future.

(Impact on renewable vs non-renewable)