Economics 101: Understanding Needs and Wants
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Questions and Answers

What is the payment received for land in a production process?

  • Salaries or wages
  • Interest
  • Profit or loss
  • Rent (correct)

    • What is an example of labor in a production process?

  • A building used for production
  • A doctor providing medical services (correct)
  • A machine used for manufacturing
  • A computer used in an office

    • What is the term for a man-made resource used for personal consumption?

  • Consumption good (correct)
  • Capital
  • Natural resource
  • Labor

    • Who or what brings all other factors of production together in order to produce something?

    <p>Entrepreneurship</p> Signup and view all the answers

    What is the payment received by the owner of a private hospital?

    <p>Profit or loss</p> Signup and view all the answers

    What is an example of capital in a production process?

    <p>A computer used in an office</p> Signup and view all the answers

    What is the primary purpose of studying economics?

    <p>To identify how to satisfy unlimited wants by using the limited resources</p> Signup and view all the answers

    What are the things that are essential for human survival?

    <p>Needs</p> Signup and view all the answers

    What is an example of a non-economic resource?

    <p>Sunshine</p> Signup and view all the answers

    What happens if a consumer doesn't pay for an economic resource?

    <p>They will be excluded from consumption</p> Signup and view all the answers

    What is an example of how a non-economic resource can become an economic resource?

    <p>When a tourist buys an airplane ticket to enjoy sunshine</p> Signup and view all the answers

    What are the four basic types of economic resources also known as?

    <p>Factors of production</p> Signup and view all the answers

    What is the difference between needs and wants?

    <p>Wants are different ways of satisfying needs</p> Signup and view all the answers

    What is the definition of economics?

    <p>The science of making choices between unlimited needs and wants and limited resources</p> Signup and view all the answers

    Study Notes

    What is Economics?

    • Economics is a science that helps make choices between unlimited needs and wants with limited resources efficiently and effectively.
    • It identifies how to satisfy unlimited wants by using limited resources.
    • Economics is the process of allocating limited resources among unlimited needs and wants.

    Needs and Wants

    • Needs are essential for human survival, e.g., water, food, clothes, shelter.
    • Wants are different ways of satisfying needs, e.g., tap water, mineral water, cool drinks, juices, and hot drinks.

    Resources

    • Resources are things used by humans to satisfy needs and wants.
    • There are two types of resources: non-economic and economic resources.

    Non-Economic Resources

    • These resources are consumed without payment, e.g., sunshine, water from a river.
    • Consumers cannot be excluded from consumption if they don't pay.

    Economic Resources

    • These resources require payment for consumption, e.g., laptop, mobile phone, food, and pen.
    • If consumers don't pay, they will be excluded from consumption.

    Types of Economic Resources (Factors of Production)

    • There are four basic types of economic resources:
      • Land
      • Labor
      • Capital
      • Entrepreneurship/Enterprise

    Land

    • Land includes all natural resources used in production, e.g., water, oil, gems, diamonds, and bare land.
    • Payment for land is rent.

    Labor

    • Labor includes physical or mental effort generated by humans to produce goods or services, e.g., doctor, teacher, laborer, engineer, carpenter.
    • Payment for labor is salaries or wages.

    Capital

    • Capital includes all man-made resources used in production, e.g., computers, buildings, machinery.
    • Man-made resources can be consumption goods or capital depending on their use.
    • Payment for capital is interest.

    Entrepreneurship

    • Entrepreneurship involves bringing all other factors of production together to produce something, e.g., owner in a private hospital, owner of a private school.
    • Payment for enterprise is profit or loss.

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    Introduction to Economics PDF

    Description

    Learn the fundamentals of economics, including the definition of economics, the importance of resource allocation, and the distinction between needs and wants.

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