SQA Higher Economics UPDATED ACTUAL
Exam Questions and CORRECT Answers
Scarcity - CORRECT ANSWER - A situation in which unlimited wants exceed the limited
resources available to fulfill those wants
Wants - CORRECT ANSWER - something that people desire but that is not necessary for
survival
Needs - CORRECT ANSWER - Basic requirements for human survival
Factors of production - CORRECT ANSWER - land, labour, capital, enterprise
Land - CORRECT ANSWER - natural resources that are used to make goods and services
Labour - CORRECT ANSWER - The physical and mental human effort used in the
production process
Capital - CORRECT ANSWER - the tools, equipment, machinery, and factories used in
the production of goods and services
Enterprise - CORRECT ANSWER - The entrepreneur who takes risk by combining the
other factors of production
Free goods - CORRECT ANSWER - Goods that are unlimited in supply therefore have no
opportunity cost and do not command a price
Economic goods - CORRECT ANSWER - a product or service that can command a price
when sold, use scarce resources and incur an opportunity cost when supplied
Exam Questions and CORRECT Answers
Scarcity - CORRECT ANSWER - A situation in which unlimited wants exceed the limited
resources available to fulfill those wants
Wants - CORRECT ANSWER - something that people desire but that is not necessary for
survival
Needs - CORRECT ANSWER - Basic requirements for human survival
Factors of production - CORRECT ANSWER - land, labour, capital, enterprise
Land - CORRECT ANSWER - natural resources that are used to make goods and services
Labour - CORRECT ANSWER - The physical and mental human effort used in the
production process
Capital - CORRECT ANSWER - the tools, equipment, machinery, and factories used in
the production of goods and services
Enterprise - CORRECT ANSWER - The entrepreneur who takes risk by combining the
other factors of production
Free goods - CORRECT ANSWER - Goods that are unlimited in supply therefore have no
opportunity cost and do not command a price
Economic goods - CORRECT ANSWER - a product or service that can command a price
when sold, use scarce resources and incur an opportunity cost when supplied
