Economics and Scarcity

The economic problem of scarcity refers to the condition where resources are limited but human wants and needs are unlimited. It is caused by the imbalance between the availability of resources and the demand for those resources.

Economic goods are goods that require a limited resource to produce and have an opportunity cost. They are scarce and attract a price in the market. On the other hand, free goods are not scarce, have no opportunity cost, and are available in unlimited supply without any price attached to them.

The four factors of production are land, labor, capital, and entrepreneurship. Land refers to all natural resources including land itself, forests, agricultural land, and underground water. Labor refers to the human effort and skills involved in production. Capital includes physical assets such as machinery, tools, and buildings used in production. Entrepreneurship refers to the ability to innovate, take risks, and organize the other factors of production to produce goods and services.

<p>The size of the population, school leaving age/retirement age, and attitude towards working women.</p> Signup and view all the answers

<p>Wages and salaries.</p> Signup and view all the answers

<p>Wind power, solar energy, tidal energy.</p> Signup and view all the answers

<p>Entrepreneurs organize the other factors of production and take risks to open and run businesses.</p> Signup and view all the answers

<p>The maximum combinations of goods and services that an economy can produce at a given time if all resources are being used efficiently.</p> Signup and view all the answers

<p>A constant PPC represents a situation where the economy is producing at its maximum potential output, while a shifting PPC represents a change in potential output due to factors such as changes in resources or technology.</p> Signup and view all the answers

<ol> <li>What to produce (what goods or services should be produced), 2. How to produce (what combination of resources and technologies to use), 3. For whom to produce (how to distribute the products or services).</li> </ol> Signup and view all the answers

<p>Microeconomics focuses on the behavior and decisions of households and firms, and the performance of individual markets, while macroeconomics studies the economy as a whole, including factors such as national output and employment.</p> Signup and view all the answers

<p>Increasing: Reclamation, Building a taller building. Decreasing: Fishing, Deforestation, Mining, Agriculture.</p> Signup and view all the answers

<p>Improving: Advanced technology. Deteriorating: Overuse.</p> Signup and view all the answers

<p>Sustainability refers to maintaining the ability of the environment and the economy to continue producing and satisfying needs and wants into the future. It depends on the preservation of the environment over time.</p> Signup and view all the answers

<p>Renewable: Wind power, Solar energy, Tidal Energy. Non-renewable: Fossil Fuels, Hunting Endangered animals.</p> Signup and view all the answers

<p>Governments have implemented Plastic taxes and Fishing moratoriums.</p> Signup and view all the answers

<p>Labor refers to the physical and mental effort that people contribute to the production of goods and services. Examples of labor include Factory Workers, Builders, Doctors.</p> Signup and view all the answers

<p>Factors that can affect the quantity of labor include the size of the population, school leaving age/retirement age, and attitudes towards working women.</p> Signup and view all the answers

<p>Capital refers to man-made resources used to produce other goods and services. Examples of capital goods include Machinery, Computers, Tools.</p> Signup and view all the answers

<p>Capital goods are used in another production, while consumer goods are used in final consumption.</p> Signup and view all the answers

<p>Entrepreneurship refers to the skills that include the ability to innovate, take risks, and seek new business opportunities. Entrepreneurs organize the other factors of production and take on the risks of success or failure of a business.</p> Signup and view all the answers

<p>The economic problem of scarcity refers to the situation where there are limited resources but unlimited wants and needs. It is caused by the imbalance between the availability of resources and the desires of individuals and society.</p> Signup and view all the answers

<p>Economic goods require a limited resource to produce and have an opportunity cost. Examples include cars, phones, and tables. Free goods, on the other hand, are not scarce and do not have an opportunity cost. Examples include air, seawater, and wind.</p> Signup and view all the answers

<p>The cost of land refers to the rent paid to the owners of land resources. Land is generally considered an immobile resource, meaning it is either impossible or costly to move. However, most land is occupationally mobile, which means it can be used for different purposes.</p> Signup and view all the answers

<p>The mobility of resources refers to the ability of factors of production to move or be moved freely and easily. It is important in economics because it allows for the efficient allocation of resources and enables factors of production to be used where they are most productive.</p> Signup and view all the answers

<p>Wants are non-essential items that we desire, such as games, cars, and holidays. Needs, on the other hand, are goods that are crucial to survival, such as food, water, and shelter.</p> Signup and view all the answers

<p>The difference between economic goods and free goods lies in their scarcity and opportunity cost. Economic goods require a limited resource to produce and have an opportunity cost, while free goods are not scarce and do not have an opportunity cost.</p> Signup and view all the answers

<p>Entrepreneurship plays a crucial role in the economy as it involves the ability to take risks and organize the other factors of production. Entrepreneurs identify opportunities, innovate, and create new businesses, leading to economic growth and development.</p> Signup and view all the answers

<p>The payment to owners of resources is called the cost of production. It includes payments such as rent for land, wages for labor, interest for capital, and profit for entrepreneurship.</p> Signup and view all the answers

<p>The factors of production that contribute to economic activity are land, labor, capital, and entrepreneurship. These resources are used in the production of goods and services to satisfy wants and needs.</p> Signup and view all the answers

<p>The maximum combinations of goods and services that an economy can produce at a given time if all resources are being used efficiently.</p> Signup and view all the answers

<p>It means that all resources are being fully utilized and the economy is producing at its maximum output.</p> Signup and view all the answers

<p>It means that the economy is not fully utilizing its resources and is producing below its maximum potential.</p> Signup and view all the answers

<p>It means that the combination of goods and services is not feasible with the current resources.</p> Signup and view all the answers

<p>It represents a situation where the economy only produces toy cars and no dolls.</p> Signup and view all the answers

<p>It represents a situation where producing more dolls requires giving up some toy cars.</p> Signup and view all the answers

<p>It represents a situation where producing more dolls requires giving up more toy cars.</p> Signup and view all the answers

<p>It represents a situation where the economy only produces dolls and no toy cars.</p> Signup and view all the answers

<p>It represents a situation where the economy is not utilizing all its resources efficiently, leading to unemployment.</p> Signup and view all the answers

<p>It represents a situation that is unattainable due to scarcity, and can only be achieved by improving the quantity and/or quality of resources.</p> Signup and view all the answers

<p>A decrease in resources, such as when workers migrate to other countries.</p> Signup and view all the answers

<p>A change in the utilization of resources, such as a decrease in the unemployment rate.</p> Signup and view all the answers

<p>An increase in the quantity and/or quality of resources, such as the introduction of compulsory education.</p> Signup and view all the answers

<p>The study of the behavior and decisions of households and firms, and the performance of individual markets.</p> Signup and view all the answers

<p>The study of the whole economy, including the country's output and number of employers.</p> Signup and view all the answers

<p>Households, firms, and government.</p> Signup and view all the answers

<p>Low prices and good quality products.</p> Signup and view all the answers

<p>As much profit as possible.</p> Signup and view all the answers

<p>A strong economy.</p> Signup and view all the answers

<p>An economic setup where individuals and businesses freely make decisions about what to produce, sell, and buy with minimal government interference.</p> Signup and view all the answers

<p>An economic system where the government decides what to produce, how to produce, and who receives it.</p> Signup and view all the answers

<p>An economy in which both the private and public sectors play an important role.</p> Signup and view all the answers

<p>Parts of the economy controlled by governments.</p> Signup and view all the answers

<p>Parts of the economy not run by the government, such as companies.</p> Signup and view all the answers

<p>An economic system where consumers determine what to produce through the price mechanism, and there is minimal government intervention.</p> Signup and view all the answers

<p>It provides an incentive for producers to respond to changes in market conditions, with price changes determined by the interaction of supply and demand.</p> Signup and view all the answers

<p>They are willing to pay less money, which leads to a decrease in profit for producers and a reduction in the production of the product.</p> Signup and view all the answers