Theme 1 -The Economic Problem 0.0 / 5 ? EconomicsThe Economic ProblemASEdexcel Created by: becky.65Created on: 05-12-16 18:28 What is scarcity? Where there are unlimited wants and finite resources 1 of 13 When does the 'economic problem' occur? When there is scarcity 2 of 13 What is the central purpose of economic activity? It is to produce goods and services to satisfy the wants and needs of society 3 of 13 What will economic activity improve? Economic welfare, the benefit gained by individuals, firms or society in the production of goods and services 4 of 13 What is a need and give four examples of a need? Needs are those things that are essential to survival i.e water, warmth, food, shelter 5 of 13 What are wants? Those things that are desired but not essential to survival 6 of 13 What 3 questions does the economic problem try to answer? What to produce? How to produce? Who to produce for? 7 of 13 What is an opportunity cost? It is the best alternative we give up when we make a choice 8 of 13 Why must we make choices in business? Because all resources are scarce so we must make choice in order to allocate these resources 9 of 13 What are trade-offs? It is when businesses make a compromise between a range of choices 10 of 13 What are economic agents? The individuals, firms ad governments that partake in economic activity, the demand and supply of goods and services 11 of 13 What is a free market? One where firms decide what goods and services to produce with limited government intervention 12 of 13 What are the four factors of production? Capital, enterprise, land and labour 13 of 13
Economics, unit 1, AQA, market failure, the economic problem, goods and services, costs, production, opportunity cost 0.0 / 5
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