Service Industry Consumption Quiz

Adam Smith

An Enquiry into the Nature and Causes of the Wealth of Nations

the rules of good household management

universal

The basic economic problem is the issue of scarcity and unlimited wants.

Scarcity refers to the limitation of productive resources like land, labour, capital, and entrepreneurship.

In economics, 'unlimited needs and wants' refers to the fact that humans have unlimited desires for goods and services, beyond just the basic needs for survival.

Consumers may have to choose between universities, electronic devices, and leisure activities. Workers may face trade-offs between projects, suppliers, and work-life balance. Producers and governments face decisions related to investments, employee wages, and business growth.

Land, labour, capital, and enterprise

Steve Jobs

Rent for land, wages for labour, interest for capital, and profits for enterprise

Factor mobility is the ability to transfer factors of production like land, labour, and capital from one production task to another. It is important in a global society to adapt to changing demands and opportunities.

Scarcity is the limitation of resources like land, labour, capital, and enterprise. Examples from the case study include food, water, and energy.

The growing middle class has growing wants and needs, which creates a scarcity issue for the future. Scarce resources have become more noticeable with the rise of the middle class in developing nations. As the income and population of the new middle class grows, their desire for goods and services will continue to grow because their desires, like all human desires, are unlimited.

Economic goods are items that have monetary value and are produced with the goal of earning income and satisfying unlimited wants. They contribute to an economy's GDP by adding value and creating the foundation for economic development.

Economic goods include consumer goods, which are the final goods sold in retail stores, such as durable goods (e.g., laptops, furniture) and non-durable goods (e.g., food, cosmetics). Economic services are actions that use the human capital of the seller to satisfy a specific want or need of the consumer.

Free goods are available without limits, able to consume without reducing the quantity to others and have zero opportunity cost to society. Economic goods add value to GDP, require the use of scarce resources, have a monetary value or price in the market, and have an opportunity cost.

No, Facebook, Twitter, and Google do not exhibit characteristics of a free good. They do not meet the criteria of being available without limits, having zero opportunity cost to society, or not using scarce resources to produce the good.

Social media platforms are economic goods, while smartphones (e.g., iPhone) are also economic goods.

Steve Jobs saw the potential of certain ideas, brought those ideas to production and market, and changed the personal computer industry by creating simple-to-use devices. He demonstrated the characteristics of an innovative and visionary entrepreneur.

Occupational mobility is when a resource changes tasks, while geographic mobility is when a resource changes location.

Education, training, and experience increase the opportunity for occupational mobility.

Using English as the global language, technology allowing virtual global mobility, supportive laws and regulations, and good transport links enhance the mobility of labour.

A tourist bus being repurposed and sold to a freight company is an example of occupational mobility of capital.

Enterprise is the most mobile factor of production, both occupationally and geographically, relying on the entrepreneur's willingness and capability to transfer skills from one industry to another.