3.1.1.2 THE NATURE AND PURPOSE OF ECONOMIC ACTIVITY

What is a need? (+3 examples)

A need is something that is necessary for survival

• food

• water

• shelter

What is a want? (+3 examples)

A want is something you desire/ that would benefit your life

• phone

• sweets

• bicycle

Define economic welfare

The overall well being of, quality of living of individuals in an economy

What is a planned economy?

When the government/state controls how people live their lives

What is the other name for a planned economy?

Command economy

Is a planned economy communist or capitalist?

Communist

Examples of countries in a planned economy

• China

• North Korea

What is a mixed economy?

The public sector is provided by the government, some resources are owned by individuals

What are the 2 categories in mixed economies?

• socialist

• capitalist

What are 2 countries that are socialist leaning?

• Norway

• Germany

What are 2 countries that are capitalist leaning?

• United States

• Singapore

Examples of mixed economies

• UK

• Australia

What is a market economy?

The role of the state is reduced (less taxes but have to pay for healthcare/education)

Is a market economy communist or capitalist?

Capitalist

Examples of countries in a market economy

• Dubai

• Abu Dhabi

What are inputs used to make?

Capital goods

What are the 4 factors of production?

• land (natural resources)

• labour (human input)

• capital (machinery)

• enterprise (organization of entrepreneurs)

What is a renewable resource?

A natural resource resource that replenishes itself at the same rate it is being consumed

• solar/wind/water

What is non renewable/ finite resource?

A resource which supply is limited and cannot be replaced at the same rate it is being consumed

• fossil fuels - coal/oil

What is meant by a scarce resource?

Something that is in limited supply, not enough to meet the demand of everyone

The demand for it exceeds the available amount

The environment as a scarce resource

Examples of physical resources

• soil

• water

• forests

• fisheries

The environment as a scarce resource

Examples of gases

• hydrogen

• oxygen

The environment as a scarce resource Examples of abstract resources

• solar energy

• good air

• clean water

What is an abstract resource?

Essential but often invisible ecosystem services that are limited/threatened by human activity

Define 'factors of production'?

Resources that are used to produce a good or a service

Land, labour, capital, enterprise