Nat 5 Economics Topic 2 - The Basic Economic Problem

Nat 5 Economics Topic 2 - The Basic Economic Problem Define The Basic Economic Problem ️️A result of scarcity - the gap between limited resources and theoretically unlimited wants Distinguish between needs and wants? ️️Needs are resources that are essential for survival while wants are resources that are not essential for surviving but rather a luxury. Give examples of needs and wants ️️Needs - food, clothing, shelter Wants - entertainment Why do Consumers, Producers, Governments have to make choices? ️️They have limited incomes/ revenue/ tax revenue Define Opportunity cost Give a model answer ️️The sacrifice of the next best alternative forgone. The opportunity cost of having x is NOT HAVING/ MAKING y What is Land (give examples) ️️This is the natural resources on offer including what is on it and the sea. (Woodlands, Minerals, oil) What is Labour (give examples) ️️This is the human effort in the production of goods and services. (factory worker, teachers) What is Capital (give examples) ️️These are the man-made resources used to produce goods or services. (vehicles, factories, roads) What is Enterprise (give examples) ️️The idea - the combination of the other factors of production to produce goods and services. (Mark zuckerburg0 Define Occupational Mobility/Immobility ️️The ability/inability of resources to change their use Define Geographical Mobility/Immobility ️️The ability/inability of resources to move location. What is Productivity and what is the formula? ️️Measure of efficiency which resources are utilised in a business. Output divided by input What is the Primary sector of Industry ️️Businesses that are involved in exploiting natural resources What is the Secondary sector of Industry ️️Businesses that are involved in manufacturing and construction. Take the natural resources and change them