What are the main economic groups?
Households/consumers
Businesses/firms
Government
International sector
What are the factors of production?
Land
Labor
Capital
Enterprise
What is the role of the factors of production?
They combine together to make a good/service and generate profit.
What is the basic economic problem?
Resources are scarce, but human wants are unlimited. This leads to the need for efficient resource allocation and decision-making.
What are the three main economic questions?
What to produce?
How to produce?
For whom to produce?
Opportunity cost
Represents the value of the next best alternative foregone when a decision is made, highlighting the trade-offs involved in economic choices.
Trade-off
Involves sacrificing one option for another when making decisions, emphasizing the need to weigh the costs and benefits of different choices.
True or False: Wants are considered first when making economic decisions.
False: Needs are considered first when making economic decisions.
True or False: Economic decisions are made in all levels of society.
True
True or False: The factors of production never combine together.
False: The factors of production do combine together in order to make a good/service and generate profit.