Basic Concepts of Economics

Wants are unlimited, Wants are competitive, Wants recur over time

Step 1: Review the characteristics of human wants from the chapter. Step 2: Human wants are unlimited because people always desire more goods and services than they can obtain. Step 3: Wants are competitive because with limited income, choosing one want means giving up another (like choosing between a movie or restaurant). Step 4: Wants recur because satisfying a want (like hunger) is temporary and the want reappears later. Step 5: The incorrect options are wrong because wants cannot be satisfied permanently (they keep coming back) and wants differ in intensity or urgency (food is more urgent

Land, Labour, Capital, Enterprise

Step 1: Recall the four main factors of production from the chapter. Step 2: Land includes all natural resources like agricultural land, forests, and minerals. Step 3: Labour is human effort (physical and mental) involved in production. Step 4: Capital consists of man-made means of production like machinery and tools. Step 5: Enterprise is the entrepreneurial skill that organizes production and takes risks. Step 6: Money is not a factor of production but a medium of exchange. Therefore, land, labour, capital, and enterprise are the correct factors of production.

True

Step 1: Review the functions of money from the chapter. Step 2: One of the primary functions of money is serving as a medium of exchange. Step 3: This means money facilitates buying and selling by being widely accepted as payment for goods and services. Step 4: Instead of bartering goods directly, people use money to buy what they need and sell what they produce. Step 5: This function makes trade much easier and more efficient than the barter system. Therefore, the statement is true.

A shirt purchased by a person

Step 1: Understand the definition of consumer goods from the chapter. Step 2: Consumer goods are those goods that directly satisfy the wants of consumers. Step 3: A shirt purchased by a person directly satisfies their need for clothing. Step 4: Machinery, raw materials, and tools are producer goods because they help in producing other goods rather than directly satisfying consumer wants. Step 5: Therefore, a shirt purchased by a person is a consumer good as it directly satisfies the consumer's want for clothing.