Economics 901 1.1-1.2 Basic economic problem

Why does scarcity exist?

• Each year workers tend to produce less than previously 
• Machines wear out in time
• There are not sufficient resources to meet everyone's wants
• There is a limit to people's wants 

Why will scarcity continue to be a problem in the future?

• Prices will rise
• Resources will always be finite 
• Needs will decrease in the future 
• World population will fall 

What factor of production's function is to make decisions and take risks?

• Capital
• Enterprise 
• Land 
• Labour 

What type of factor of production is a road?

• Capital
• Enterprise
• Labour
• Land 

What is meant by 'labour' in economics?

• Hard physical work used to produce manufactured goods 
• Human mental and physical effort used for producing goods and services
• Natural resources used in the productive process
• Risk taking and organising the factors of production

Which factor of production is the least mobile?

• Capital 
• Enterprise
• Labour
• Land 

Which is the following is a free good?

• A vaccination provided by the state without charge 
• Prizes of food items given away by a supermarket 
• Recycled paper
• Wind coming from the sea

Why does scarcity exist?

• Each year workers tend to produce less than previously 
• Machines wear out in time
• There are not sufficient resources to meet everyone's wants
• There is a limit to people's wants 

Which of the below is not scarce resource?

• Oil

• Sea water

• Natural gas

• Gold

A market is

• a place where buyers and sellers come together
• a place where people can buy goods
• a place where buyers and sellers come together and agree a price for the exchange of goods and services.