Basics of economics

What is the difference between a need and a want?

Needs are required to survive; wants are things we'd like but don't need.

What are unlimited wants?

People have endless wants for goods and services.

What are limited means?

The limited resources we have to satisfy our wants, such as time and money.

What is scarcity?

Scarcity occurs because resources are limited but human wants are unlimited.

What is opportunity cost?

The next best option given up when making a choice.

What is choice in economics?

An economic decision between two or more alternatives.

How are scarcity, choice and opportunity cost connected?

Scarcity forces us to choose, and every choice has an opportunity cost.

What is economics?

The study of how people use limited resources to satisfy their needs and wants.

What are values?

Core beliefs about what a person, group or society considers important.

How do values affect decision-making?

They influence which options people consider important when making choices.

What is conflict?

A disagreement between people or groups.

What is a compromise?

An agreement where both sides give up something to settle a conflict.

How can values cause conflict?

People with different values may disagree about which choice is best.

How can a compromise resolve conflict?

Both sides give up something to reach an agreement.

What is a consumer?

A person who uses goods and services.

What is a producer?

A person or business that makes goods or provides services.

What are goods?

Tangible items that can be seen and touched.

What are services?

Intangible activities or actions provided to meet people's needs or wants.

What is the difference between free goods and economic goods?

Free goods are unlimited in supply; economic goods are limited in supply.

What are consumer goods?

Goods bought for personal use or consumption.

What are capital goods?

Goods businesses use to produce other goods and services.

What are the four factors of production?

Land, labour, capital and entrepreneurship.

What is land as a factor of production?

Natural resources used in production, such as land, water and minerals.

What is labour as a factor of production?

Human effort used in production, including physical and mental work.

What is capital as a factor of production?

Man-made resources used to produce goods and services, such as machinery.

What is entrepreneurship as a factor of production?

The ability to organise resources, create ideas and take business risks.

What is the primary sector?

Industries that extract or harvest raw materials from nature.

Give an example of the primary sector.

Farming, fishing, forestry or mining.

What is the secondary sector?

Industries that process raw materials into finished or manufactured goods.

Give an example of the secondary sector.

A factory turning timber into furniture.

What is the tertiary sector?

Industries that provide services to consumers and businesses.

Give an example of the tertiary sector.

Retail, banking, transport, healthcare or education.

What is labour-intensive production?

Production that uses more labour than capital equipment.

What is capital-intensive production?

Production that uses more capital equipment than labour.

What is an example of labour-intensive production?

A restaurant using many workers to provide its services.

What is an example of capital-intensive production?

A factory using machinery and robots to produce goods.