Economics Unit 1 - The Economic Problem

HideShow resource information
What is the central purpose of economic activity?
The production of goods and services to satisfy needs and wants
1 of 14
What are the three main questions?
Who should we produce for? What should we produce? How can we produce it?
2 of 14
What are the factors of production? (CELL)
Capital, Enterprise, Land, Labour
3 of 14
What are the rewards for the factors of production?
Interest, Profit, Rent, Wages
4 of 14
What is a free good?
A good that has no opportunity cost
5 of 14
What is an economic good?
A good that has a benefit to society, but it has an opportunity cost
6 of 14
What are the 3 main onjectives f
Profit, Revenue (sales), Growth
7 of 14
What is the main objective for an individual?
Maximise welfare
8 of 14
What is a scarce resource?
Factors of production for which demand exceeds supply
9 of 14
What are the X and Y axis on a PPF?
X = consumer goods. Y = capital goods
10 of 14
If an economy was productively efficient, where would the economy be on the PPF?
Anywhere on the PPF
11 of 14
If an economy sits with the PPF, what does that mean?
The economy is not using all of the available resources
12 of 14
What is an opportunity cost?
The next best alternative forgone
13 of 14
What is the difference between a positive statement and a normative statement?
A positive statement can be verified true or false. A normative statement is the expression of an opinion
14 of 14

Other cards in this set

Card 2

Front

What are the three main questions?

Back

Who should we produce for? What should we produce? How can we produce it?

Card 3

Front

What are the factors of production? (CELL)

Back

Preview of the front of card 3

Card 4

Front

What are the rewards for the factors of production?

Back

Preview of the front of card 4

Card 5

Front

What is a free good?

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all The economic problem resources »