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The basic economic problem is that humans have unlimited needs and wants, but earths has limited resources, this problem leads to scarcity. Unlimited wants and needs + limited resources = scarcity

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2. Explain the difference between GOODS & SERVICES with examples.

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2. Explain the difference between GOODS & SERVICES with examples.

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Goods are material items that are ready for purchase for a certain price (tangible items)
Services are amenities or facilities provided by the seller (intangible items)
example:
good: car
service: car dealer

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4. Explain the concept of OCCUPATIONAL MOBILITY

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4. Explain the concept of OCCUPATIONAL MOBILITY

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Occupational mobility refers to the ease with which a person is able to change between jobs.

For example, an accountant and a computer programmer can be switch as it is highly mobile.

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Land: The natural resources required in the production, such as water, coal, wood and other natural products
Labour: The human resource required in the production process, skilled and unskilled labour
Capital: The machinery, tools and equipment required during the production process
Entrepreneurship: The skills a business person requires to combine and manage the other 3 factors for the production

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5. Define and give an example of OPPORTUNITY COST 

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5. Define and give an example of OPPORTUNITY COST 

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The cost of next best alternative forgone.

For example, you have a decision between studying or going to the cinema, each as its own benefits and sacrifices as the person needs to choose the best option.

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6. Calculate the opportunity cost to the farmer of producing 1 unit of wheat.

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6. Calculate the opportunity cost to the farmer of producing 1 unit of wheat.

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Label E is a point that production cannot reach.
Label F is a point that show some of the production are not used.

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8. With reference to the PPC diagram, explain how GOVERNMENT SUBSIDIES may have an impact on levels of production.

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8. With reference to the PPC diagram, explain how GOVERNMENT SUBSIDIES may have an impact on levels of production.

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9. With reference to the PPC Diagram, explain the term MOVEMENT.

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9. With reference to the PPC Diagram, explain the term MOVEMENT.

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A movement along a PPC results in an opportunity cost. This means that if the society wants to produce more B products, the amount of D products will decrease.

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10. What does a production possibility curve diagram show?

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10. What does a production possibility curve diagram show?

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The production possibility curve (PPC) represents the maximum and minimum combination of goods and services which can be produced in an economy.

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My answer is A

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A

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Answer = C

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Answer = D

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Answer = B

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Answer = C

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Answer = A

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B

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Answer= A

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1. With reference to the diagram, explain the term MARKET EQUILIBRIUM.

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1. With reference to the diagram, explain the term MARKET EQUILIBRIUM.

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Market equilibrium is the point that surplus or shortage will not occur.

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Demand refers to a consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service.

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3. Give an example of SUBSTITUTES for a product of your choice.

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3. Give an example of SUBSTITUTES for a product of your choice.

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Pepsi is a substitute for Coca Cola

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4. With reference to the diagram, give THREE examples of non-price factors.

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4. With reference to the diagram, give THREE examples of non-price factors.

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rise in customer's income
good promotion.

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5. With reference to the diagram, explain how an INCREASE IN SUPPLY is shown.

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5. With reference to the diagram, explain how an INCREASE IN SUPPLY is shown.

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There's an increase in supply because the curve shift to right from S1 to S2, now the quantity supplied is at a higher amount which is moved right at the same price level. This indicates that the supply is more comparing to before at the same given price.

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6. With reference to the diagram, explain ONE REASON for a reduction in supply levels.

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6. With reference to the diagram, explain ONE REASON for a reduction in supply levels.

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The curve is shifts. Higher cost spending on the materials that use to produce the good.

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1. medium of exchange
2. measure of value
3. store of value
4. standard of deferred payment

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2. Explain why Governments do not allow the Central Bank to print more money in order to reduce poverty.

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2. Explain why Governments do not allow the Central Bank to print more money in order to reduce poverty.

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money must be limited in supply in order to keep its value.

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3. Define the term DOUBLE COINCIDENCE OF WANTS, give an example of how the bartering system was ineffective.

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3. Define the term DOUBLE COINCIDENCE OF WANTS, give an example of how the bartering system was ineffective.

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A double coincidence of wants is when two people must both want what the other party is offering. The bartering system is the act of swapping items in exchange for the other through a process of bargaining and negotiation. The disadvantage of using the bartering system is that, there may not always be a double coincidence of wants, therefore, both parties or one party may not get what they wanted.

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Explain TWO INFLUENCES of HOUSEHOLD SAVING (other than income).

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Explain TWO INFLUENCES of HOUSEHOLD SAVING (other than income).

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Inflation, deflation.

Interest rates.

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4. Explain TWO NON-WAGE FACTORS which affect workers' decision of which industry to work in.

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4. Explain TWO NON-WAGE FACTORS which affect workers' decision of which industry to work in.

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Holiday
Security

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The national minimum wage refers to the countries lowest wage per hour that a worker may be paid

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6. How might Government Legislation be implemented to INCREASE LABOUR SUPPLY?

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6. How might Government Legislation be implemented to INCREASE LABOUR SUPPLY?

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The government could set a higher national minimum wage, when wages increase the supply of labour increases as well.

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7. What might cause a PPC to shift to the left? - LOUISE

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7. What might cause a PPC to shift to the left? - LOUISE

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The PPC curve will shift to the left when production capacity decreases because of less access, change in seasons/weather patterns, and no improvement in technology.

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7. With reference to the diagram explain the impact of WAGES on LABOUR SUPPLIED

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7. With reference to the diagram explain the impact of WAGES on LABOUR SUPPLIED

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If the wage rate in an industry increases from W1 to W2, the number of people willing to work will increase from N1 to N2 because more worker are attracted by high wages.

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8. READ THE CASE STUDY - Give TWO REASONS why there is a global shortage of Doctors and Nurses

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8. READ THE CASE STUDY - Give TWO REASONS why there is a global shortage of Doctors and Nurses

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There are global shortage of Doctors and Nurses due to many Doctors and Nurses migrate overseas to work.
There is a period of time needed to train a nurse and a doctor.

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9. READ THE CASE STUDY - Analyse how countries can attract individuals to professions in which they have a shortage of workers.

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9. READ THE CASE STUDY - Analyse how countries can attract individuals to professions in which they have a shortage of workers.

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Answer = B

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C

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Answer = D

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B

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A subsidy is a financial incentive offered by the government to help individual firms or businesses.

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Give an example of how Government Objectives can be implemented by a supplier to gain subsidies.

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Give an example of how Government Objectives can be implemented by a supplier to gain subsidies.

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Increase employment rates
Produce public goods

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Explain how National Minimum Wages might affect Employment levels.

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Explain how National Minimum Wages might affect Employment levels.

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The national minimum wage could affect employment levels in both ways. When there is an increase in NMW or that the NMW is high, the employment levels will be low because the firm has to pay more money per person than before, making it harder for the firm to employ more people as they have to pay more. Vice versa, a decrease in NMW will raise employment levels.

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It shows the maximum combination of goods and services which can be produced in an economy.

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An external cost is the cost incurred by an individual, firm or community as a result of an economic transaction which they are not directly involved in.

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Explain the term PRICE ELASTICITY OF DEMAND and give an example of a Product with has Price Elasticity of Demand.

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Explain the term PRICE ELASTICITY OF DEMAND and give an example of a Product with has Price Elasticity of Demand.

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Price elasticity of demand is how the demand response when there is a change in price. price elastic, means the demand response hugely when there are a little change  in price, so the change of % in price is smaller than the change of % in demand. price inelastic demand means  the change of % in price is larger than the change of % in demand.
Product with price elastic demand-banana

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How might EXTERNAL FACTORS such as the WEATHER IMPACT DEMAND for products - Give examples.

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How might EXTERNAL FACTORS such as the WEATHER IMPACT DEMAND for products - Give examples.

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For example, if today is raining, the demand of umbrella will increase.

Seasons will also affect demand. When its summer, the demand for ice creams and beach resorts will increase as more people eat ice cream during summer rather than winter.

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When workers become experts in a particular production process

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The law of supply states that when a price of a good or service increases, the quantity supplied will also increase. When the price decreases, the quantity supplied will also decrease.

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Social costs are the true (or full) costs of consumption or production to society
as a whole

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Explain the OPPORTUNITY COST to the Government of allocating financial resources to building a new school.

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Explain the OPPORTUNITY COST to the Government of allocating financial resources to building a new school.

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The opportunity cost could be using the available financial resources to build a new hospital to improve the healthcare system. This is a opportunity cost because money is scarce and that if you spend the limited money to build a new school, you give up the chance to use the money and build a new hospital. (Basic Economic Problem)

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List TWO WAGE FACTORS influencing levels of pay.

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List TWO WAGE FACTORS influencing levels of pay.

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Performance-related pay and bonuses

Ability to pay --> amount of sales, tax, savings, cost of training, etc.
Productivity --> performance, directly related to quality and sales.

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Explain how INTEREST RATES can impact household saving.

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Explain how INTEREST RATES can impact household saving.

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Higher interest rates encourage households to save more, since there is more reward for saving, and they could get more unearned income from the higher interest rate. When there is a lower interest rate, households might decrease their savings and increase their spending/borrowing since the cost of borrowing also decreases.

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How might EXTERNAL FACTORS such as WEATHER PATTERNS (SEASONAL CHANGES) impact SUPPLY? (production)

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How might EXTERNAL FACTORS such as WEATHER PATTERNS (SEASONAL CHANGES) impact SUPPLY? (production)

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Weather patterns or seasonal changes may affect supply. For example, blizzards, snow and foggy weather during winter seasons may slow down the speed of supply, impacting and lowering down the quantity supplied, which may raise the demand if the product is very needed.

Example: lychees. Lychees can only be grown under cold temperatures (35–45 oF) for 100 hours. Then they will bloom in summer. This type of fruit may not be available at all times.