Economics Theme 1 (Topic 1.1 Enterprise and Entrepreneurs)

Scarcity

When there’s finite resources to meet unlimited wants

Economic problem

Managing and resources and distributing them to meet people’s demands

Opportunity cost

Making a decision that could give up value or benefit from an alternative choice

Need

basic requirement that is essential for human survival

Capital

Man made goods used to produce others goods and services

Want

Non-essential desire or aspiration for goods and services that individuals would like to consume to improve their quality of life, comfort, or satisfaction.

Social Welfare

Wellbeing and happiness of society as a whole including distribution of resources to meet people’s needs and wants.

Incentive

A reward or penalty that motives economic agents to behave in a certain way or to change their choices

Economic Agents

Firms

Consumers

Government

Free Market

Economic system where all resources are allocated by private individuals and firms through price mechanism, with zero government intervention

Renewable Resources

Natural resources that replenish at a faster rate than they are depleted

Non-Renewble resources

Natural resources that exist in limited supply and are depleted through use