1.1 The Nature of the Economic Problem (Cambridge (CIE) IGCSE Economics)

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  • Define the term scarcity.

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  • Define the term scarcity.

    Scarcity is the situation where resources are finite in relation to unlimited human wants and needs.

  • What are factors of production?

    Factors of production are the scarce resources (land, labour, capital, enterprise) used in the production of goods and services.

  • Define the term needs.

    Needs are essential requirements for human life, such as shelter, food, and clothing.

  • What does the term wants mean?

    Wants are non-essential desires, such as better housing or a yacht.

  • Define the term economic goods.

    Economic goods are products that are scarce in relation to demand, making them valuable and subject to the price mechanism.

  • True or False?

    Free goods are abundant in supply.

    True.

    Free goods are abundant in supply.

  • How is the term resource allocation defined?

    Resource allocation is the decision-making process of assigning scarce resources to their most efficient use.

  • What is opportunity cost?

    Opportunity cost is the next best alternative given up when a choice is made.

  • State the meaning of the term consumers.

    Consumers are individuals or households that use or consume goods and services.

  • Define the term producers.

    Producers are businesses or individuals who create or supply goods and services.