Topics 1: Introduction to Microeconomics (The economics problem)#1

Question 1

Define Basic economic problem

Answer 1

resources have to be allocated between competing uses because wants are infinite whilst resources are scarce.

Question 2

Define Capital

Answer 2

as a factor of production is the stock of manufactured resources used in the production of goods and services.

Question 3

Define Choice

Answer 3

economic choices involve the alternative uses of scarce resources.

Question 4

Define Economic goods

Answer 4

goods that are scarce because their use
has an opportunity cost.

Question 5

Define Entrepreneurs

Answer 5

individuals who seek out profitable
opportunities for production and take risks in attempting to exploit these.

Question 6

Define Enterprise

Answer 6

as a factor of production is
the seeking out of profitable opportunities for production and taking risks in attempting to exploit these.

Question 7

Define Factors of production

Answer 7

the inputs to the production process:
land, labour, capital and enterprise or entrepreneurship.

Question 8

Define Fixed Capital

Answer 8

economic resources such as factories and
hospitals which are used to transform working capital into goods and services.

Question 9

Define Free goods

Answer 9

goods that are unlimited in supply and which therefore have no opportunity cost.

Question 10

Define Human capital

Answer 10

the value of the productive potential of an
individual or group or workers; it is made up of the skills, talents, education and training of an individual or group and
represents the value of future earnings and production.