1) What are economic resources?
(Answer) The factors of production - land, labour, capital and enterprise. These comprise the inputs for all types of production.
2) Why are economic resources always scarce?
(Answer) Because the demand for goods and services always exceeds the supply available. Human wants are potentially unlimited whereas resources are scarce.
3) What are natural resources?
(Answer) These are provided by nature e.g. agricultural land. However they also include all the resources naturally ocuring in the land and seas such as oil and minerals.
4) How rich is Ireland in natural resources?
(Answer) We are well endowed with agricultural land. However we are lacking in mineral and energy sources esp. oil.
5) Economic output is made up of goods and services. How do they differ?
(Answer) Goods are tangible e.g. food and clothing; services are intangible e.g. education and entertainment.
6) What in economics is meant by a free good?
(Answer) A free good is in such plentiful supply that no one will be willing to pay a price for it e.g. air.
7) Which of the following are free goods?
(i) tap water in Ireland (ii) bottled water in a supermarket (iii) air (iv) primary education (v) 3rd level education(Answer) (i) and (iii)
8) What gives goods and services economic value?
(Answer) They must be scarce in relation to the demand for them
9) What distinguishes a consumer from a capital good?
(Answer) A consumer good is wanted for its own benefit e.g. a TV; a capital good is wanted as a means to aid production e.g. factory equipment. Sometimes the same good can have both a consumer and capital use. Private cars would be classified as consumer items; business cars would be classified as capital items.
10) Which of the following are goods?
(i) a factory (ii) a computer (iii) a meal in a restaurant (iv) a business course (v) a business school
(Answer) (i), (ii), (v)
11) What are the factors of production?
(Answer) Land, labour, capital and enterprise
12) In the following cases which would typically be the most important factor ?
(i) agricultural production (ii) professional practices (iii) cement production (iv) centre city store (v) creation of a new product (iv) a successful football team (vi) exploration for new oil reserves
(Answer) (i) land, (ii) labour, (iii) capital, (iv) land (v) enterprise (vi) labour (vi) capital or enterprise
13) What are the three central problems of every economic society?
(Answer) What to produce (and how much) relating to consumption; how to produce relating to production; for whom to produce relating to distribution.