Introduction to Economics

A country has an absolute advantage when it can produce

• more good and services than another country

• goods and services more efficiently than another country with the same set of resources

• more services than goods (Smart economy)

• more goods than services (Manufacturing economy)

An organisation or enterprise engaged in production and trade of goods or services, usually for profit.

(a)  

Capital refers to

• physical equipment such as buildings

• human capital such as intellectual property

• tools used in production such as machinery

• all answers are correct

An economic model that provides a theoretical and simplified representation of the economy is called the

• Circular Flow of Income Model

• Economic Progress Model

• Profit-making Model

• Flow of Money Model

An ability of a country/economy to gain from trade with another country as this allows the country to specialise is called (a)   advantage.

A person or a group that is the final user of goods or services within an economy.

(a)  

Key groups involved in the economy are

• Government

• Households (consumers)

• Businesses

• Financial Institutions (Banks)

Economic growth is an increase in

• the quantity of goods and services produced in an economy over a period of time

• employment available in an economy

• wealth of a country's population

• all answers are correct

An amount of goods or services that consumers are willing and able to purchase at a particular point in time.

(a)  

Examples of goods include

• bread

• milk

• lawn-mowing

• car