Part 1

Question 1

Definition of Economics

Answer 1

The study of how individuals choose to use the scarce resources that nature and previous
generations have provided to satisfy their wants

Question 2

Definition of Microeconomics

Answer 2

The study/examination of the functioning and individual industries + the behaviour of individuals decision making.

Question 3

Definition of Macroeconomics

Answer 3

The study of the economy as a whole

Question 4

The Economic Problem

Answer 4

Unlimited wants + limited resources = SCARCITY

Question 5

The 3 Fundamental Economic Questions.

Answer 5

1. What to Produce?
   (Changes overtime due to demand)
2. How to Produce?
   (Produced using “Factors of Production”) AKA=CELL

CELL
-Capital
-Enterprise
-Land
-Labour

3.Whom to Produce to?
(Depends on buyers/consumers income and price of the product they need to pay)

Question 6

Factors of Production(CELL)

1.Capital

Answer 6

Man manufactured tools or equipment that businesses use to aid their production process.

E.g:i) machinery
ii) technology
iii)buildings

Question 7

Factors of Production(CELL)

2. Entrepreneursip

Answer 7

The human resource that is willing to take the risk of starting up the business.

Question 8

Factors of Production(CELL)

3.Land

Answer 8

AKA natural resources

Types of natural resources:

1.Renewable
-can be replenished
E.g:i) water
ii) wood
iii) solar energy

2.Non-renewable
-cannot be replaced after used
E.g:i) coal
ii) gas
iii) oil

3.Sustainable
-renwable resources can still be