SEC3 - Nature of 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 is meant by opportunity cost?

• The next best alternative foregone
• The cost of the item selected
• The cost of exploring business opportunities
• The labour used in producing the product 

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

Which of these is not a decision which is made to solve the basic economic problem?

• What to produce

• How to produce

• Why to produce

• For whom to produce

What happens every time we make a decision?

• We win!

• We incur an opportunity cost

• We incur an opportunity loss

• We incur an opportunity cost of multiple other options

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.

The basic economic problem can never be eliminated.

• true
• false