Scarcity,choice And Circular Flow Of Income Key Terms

Question 1

Economics

Answer 1

A social science which studies how individuals,organisations and the government have limited resources and have to make choices in order to satisfy their needs and wants

Question 2

Rational behaviour

Answer 2

A consumer is more likely to buy an item that is at a lower price than a higher price or buying items that are believed to be better value

Question 3

Irrational behaviour

Answer 3

We can make lazy choices or be influenced by family friends and social media

Question 4

Sectors of the economy

Answer 4

Public
Private
Voluntary (non profit)

Question 5

Circular flow of income

Answer 5

Shows how money flows through the economic system

Question 6

Economic resource/factors of production

Answer 6

These are needed to produce goods and services.The four factors of production are:land,labour,capital and enterprise

Question 7

Economy

Answer 7

The way a particular country or region produces(makes goods and services),consumes and distributes its economic resources(the factors of production)

Question 8

Scarcity/choice

Answer 8

We always want more than we have this concept is know as scarcity,eg. we have limited income and have to make a choice between satisfying our needs and wants considering our limited income

Question 9

Centrally planned economy

Answer 9

The government controls all factories of production and makes all choices about economic activity,citizens are employees rather than entrepreneurs eg. North Korea

Question 10

Mixed economy

Answer 10

Mixture of private owned and state owned businesses,the government provide essential services eg. Ireland

Question 11

Free enterprise

Answer 11

Companies and individuals are free to make decisions about the production of goods are services without government intervention eg. US