Needs and Wants and Scarcity

Question 1

Define ‘Scarcity’

Answer 1

Scarcity is where resources are limited but needs and wants are unlimited meaning that the demand for a good or service is greater than the availability.

Question 2

Outline an economic system.

Answer 2

An economic system is a particular way of deciding how to best use those scarce materials to produce the goods and services it’s people need and want.

Question 3

Describe Producers.

Answer 3

Producers are one out of the four key participants in the economy and their job is to make goods and services for consumers. These goods and services is put on the product market (or output)

Question 4

Describe Consumers.

Answer 4

Consumers are one of the four key participants in the economy because they are the ones who drives the demands for goods and services. They also work labour for their producers (known as the resource market) and can receive money from them in return for the work they get done.