theme 1 nature of economcis

Question 1

the economic problem

Answer 1

humans have infinite (unlimited) wants and needs but only have finite (limited resources) to fulfil them

Question 2

the factors of production

Answer 2

land, labour, capital and enterprise, the resources we use to produce goods and services

Question 3

opportunity cost

Answer 3

the next best alternative foregone

Question 4

ppf

Answer 4

showing the maximum level of output of two goods that an economy can make in a certain period of time. illustrates opportunity cost

Question 5

specialisation

Answer 5

when a person, firm or even a country, concentrates on producing or doing one thing

Question 6

the division of labour

Answer 6

production of complex good and service is broken down into lots of smaller and simpler tasks for different workers or machines

Question 7

the market

Answer 7

a place where buyers and sellers and brought together to exchange goods and services for a price

Question 8

free market economy

Answer 8

all the resources are allocated by the market forces of supply and demand

Question 9

centrally planned economy -

Answer 9

all the resources are allocated by the government