Week 1 – Worksheet 3: Homework – Introduction to economics

and Factors of production

Memorandum

Section 1 – Introduction to Economics

Multiple Choice Questions
1. What does scarcity of resources refer to?
a) There are a lot of resources available
b) There are not a lot of resources available
c) Resources can easily be found by the consumer
d) None of the above

2. Which of the following is an example of a free good?

a) Wind coming from the sea
b) A desk in the classroom
c) A chair in the classroom
d) A book used for studying

3. Which sentence below describes the economic problem the best?

a) Limited resources are available to satisfy customer’s unlimited needs
b) Unlimited resources are available to satisfy customer’s limited needs
c) Unlimited resources are available to satisfy customer’s unlimited needs
d) None of the above

4. Which of the following is an example of an economic good?

a) Sunshine
b) Wind from the sea
c) Chair
d) None of the above

5. Which of the following is an example of income?

a) Salary
b) Spending money on food
c) Paying for education

Write down the definition of the below terms

a) The economic problem

There are limited resources available to satisfy the consumer’s unlimited wants and
needs.
b) What is an economic good?

The majority of goods and services are referred to as economic goods. This means that
in order to produce the goods and services, resources are required and resources are
limited in supply. An example of an economic good is a carpet. Labour and materials are
used to create the carpet.

c) What is a free good?

Free goods are much rarer than economic goods. Free goods do not require resources
to produce the good or service and therefore consumers do not have to pay for the use
thereof. An example of a free good is sunshine. This is available to everyone.

Section 2 – Factors of production

List the 4 factors of production:

1. Labour
2. Land
3. Capital
4. Enterprise

Provide your own example/s for each of the production factors listed above:

1. Land: Wood
2. Labour: Tractor driver on a farm
3. Capital: Computer
4. Enterprise: Founder of a company
 Match the term in Column A with the correct definition in Column C. Write the
correct letter of the answer in Column B.

COLUMN A COLUMN B COLUMN C

a) Land refers to the earth. Crops are grown.
1. Capital d) Offices and factories are built. Any natural
resource which is used in production.
b) Human efforts. Mental and physical effort when
2. Land a) producing a good or service. Offices and factories
are built.
c) This factor refers to entrepreneurs and
3. Labour b) businessmen- and woman who combine the
other three factors to build their business.
d) Any human-made (manufactured) good used to
4. Enterprise c) produce other products or services. Offices,
factories, machinery, railways and tools.

Multiple Choice Questions

1. Which of the following is an example of land?
a) Machines
b) Car
c) Textbook
d) Minerals (gold and silver)

2. Which of the following is an example of labour?

a) Student at the university
b) Mother of a child
c) Train station
d) Bus driver

3. Which of the following is an example of capital?

a) Machines
b) Machine worker
c) Doctor
d) Trees

4. Which of the following is an example of enterprise?

a) Directors of a company
b) Desk
c) Train
d) Minerals (gold and silver)