question
1. The three basic types of economic resources. (p.4-5)
answer
1. Labour (intellectual, physical)
2. Land (natural resources)
3. Capital (tools, equipment, machines, technology)
2. Land (natural resources)
3. Capital (tools, equipment, machines, technology)
question
2. The nature of the basic economic problem of "scarcity", and how a production-possibilities curve illustrates the problem of scarcity. (p.6-10)
answer
We have unlimited needs and have limited resources.
question
3. The meaning of "opportunity cost". (p.6-10)
answer
Producing more of one good means accepting you will have less of another. (When you make an economic choice, you exclude other choices.)
question
4. (a) The meaning of "productivity". (p.5, 11)
(b) Why productivity is considered to be a key factor underlying the economic prosperity of a society. (p.5, 8)
(b) Why productivity is considered to be a key factor underlying the economic prosperity of a society. (p.5, 8)
answer
a) Labour Productivity = output per worker per hour
= output/worker x hours
Labour Cost (or Efficiency) = Wage/Unit
b) High efficiency lends itself to high standards of living
= output/worker x hours
Labour Cost (or Efficiency) = Wage/Unit
b) High efficiency lends itself to high standards of living
question
5. How capital equipment contributes to higher living standards. (p.5, 12)
answer
Capital equipment increases efficiency that increases productivity and drives down cost of production.
question
6. (a) The meaning of "effectiveness". (p.11)
(b) The meaning of "efficiency". (p.11)
(b) The meaning of "efficiency". (p.11)
answer
a) maximum output with minimum input
b) produces what people want and need
b) produces what people want and need
question
11. Given a decision by the management of a business, explain how that decision would be intended to affect the efficiency and/or effectiveness of that business.
answer
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question
12. Given an economic decision, identify whether that decision is an answer to the what to produce question, or the how to produce it question, or the who gets how much question (also known as the for whom question).
answer
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question
9. Given a production-possibilities curve, identify the opportunity cost of producing more of one of the products.
answer
You can have more of product B if you accept less of product A. Tools require time investment but leads to productivity increases, production possibilities become more of B and A.
question
7. How effectiveness and efficiency contribute to higher living standards. (p.10-13)
answer
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question
8. The meaning of each of the three basic questions of economics. (p.11-13)
answer
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question
10. Given a decision, identify the opportunity cost of that decision.
answer
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