ECO QUESTION AND ANSWERS

Q1. What is mean by the economic problem? = Economic problem is when there are not enough goods and services to satisfy people’s wants. Q2. What are the four factors of production? Explain. = They are Land, Labour, Capital and Enterprise. • Land= gifts of nature available for production. • Labour= Human effort used in producing goods and services. • Capital= Human made goods used in production. • Enterprise= Risk bearing and decision making in business. Q3. What are the numbers of workers determined by? = The number of workers is determined by: • The size of the population • The age structure of the population • The retirement age • The school leaving age • Attitude to working women. Q4. What are the influences of opportunity cost on decision making? = 1. Opportunity cost and consumers Consumers are buyers and users of goods and services. The vast majority of us cannot buy everything we like. We are then likely to choose a best item. The closer the two items are in quality and price, the harder the choice will be. 2. Opportunity cost and workers Undertaking one job involves an opportunity cost. People employed as teacher might also decide to work as civil servants. This will be influenced by a number of factors, including the wage paid, chances of promotion, job satisfaction and so on..