IGCSE Economics - Section 1

The basic economic problem is …

• Meeting increased demand for goods and services with limited resources

• How to satisfy limited wants and needs with unlimited resources

• The interaction of market forces to satisfy unlimited needs and wants

• How to allocate scarce resources to satisfy unlimited needs and wants

An olive farm in northern Italy produces organic olive oil which it sells on its website to specialist shops around the world. An example of primary industry activity is ...

• bottling the olive oil

• Crushing the olives to extract the oil

• Growing olive trees

• Selling the oil over the internet

Which are three basic economic questions addressed by an economy?

• For whom should production take place?

• When should production take place?

• What production should take place?

• How should production take place?

Which term is used to describe non-physical items, such as haircuts, bus journeys and internet access?

• Factors of production

• Goods

• Services

• Opportunity cost

Economic goods example

• Public domain web wage

• Seawater

• the sun light

• Housing

What is the generic name for the human resources in the production process?

• Capital

• Enterprise

• Labour

• Land

Production of any good or service requires resources known as ...

• Factors of production

• land

• production facitilies

• raw materials

hat is the name of the reward for use of capital in the production process?

• Rent

• Profit

• Interest

• Salaries

Which refers to the willingness and ability of a person to relocate from one area to another for employment purposes?

• Geographical mobility

• Incentives to work

• Occupational mobility

• Regional unemployment

Why does almost every economic choice made have an opportunity cost?

• In most cases, there is an alternative option

• Resources are not allocated efficiently

• In most cases, there is no alternative option

• People have infinite wants