Video: Question Sheet Video Answer Key - King City SS Business

CIA 4U1 Basic Economic Concepts Mr. Raposo
1. Define economics:
Answer: the study of the use of resources to produce goods and services.
2. What principle (similar to wintering animals) is economics based on?
Answer: Scarcity, like animals in the winter looking for food.
3. What is one of the most important resources on earth? What can be
said about its distribution? Which geographic areas find this
resource scarce? What happens to the price of this resource in these
areas?
Answer: Oil. Reserves are unevenly distributed around the world. Oil is
scarce in Europe and Japan.
4. What happens to this resource after it is extracted?
Answer: It has to be refined and lack of this technology can make oil
scarce.
5. What happened in Colonial America?
Answer: Land was abundant but labour was scarce. Slaves were brought
in to work the land.
6. What is the key operating principle at the basis of economics?
Answer: Opportunity cost.
7. What does this principle state?
Answer: If you have more of one thing, you must have less of another
(you can’t have it all).
8. How does opportunity cost impact business? How does it impact
consumers? How does it impact all decisions?
Answer: Business can by equipment/hire people or sub-out work to
another business. Consumers must choose to buy toys and may give up
telescope, or shoes or jewellery. Even how you choose to spend your time
is affected by opportunity cost. Watch T.V. give up studying or outdoor
time.

CIA 4U1 Basic Economic Concepts Mr. Raposo
9. Where can western economies trace their historical beginnings to?
Answer: Kings and Queens of Europe. Monarchs ran centrally
controlled economies. 1770’s saw the emergence of a new kind of
economy (the free market economy).
10. What kind of market system emerged in Russia and China during the
20 th century?
Answer: Communism (centrally planned and controlled).
11. Has this type of economic system been successful?
Answer: No, by the end of the 20 th century this type of system seems to
have failed.
12. What happened over time to labour as population increased?
Answer: Labour became specialized and a division of labour occurred.
13. What was the “corner stone” of the industrial revolution?
Answer: The production line and its use of machines to produce goods
and supply services.
14. What is needed to make division of labour work?
Answer: Money. A medium of exchange accepted by everyone.
15. Central Banks are responsible for making sure that there is enough
money in circulation. In the U.S. this is called The Federal Reserve.
In Canada, it’s the Bank of Canada.
16. The goal of the corporation is to produce goods and services to make
a profit.
17. An “arena” where goods and services can be exchange is called a
MARKET.

CIA 4U1 Basic Economic Concepts Mr. Raposo
18. What determines prices? Answer: Supply and demand
19. How are corporations like people?
Answer: They are born, grow, live and die.
20. What are the 2 factors of corporate success?
Answer: Consumer or market acceptance and profitability in combining
factors of production to produce the good and service.
21. How is the computer an example of corporate success?
Answer: Computer software filled a need (replacing the type writer and
manual complex calculations), user friendliness interface made it
accepted by the market (to many people) and lower production costs
resulted in lower prices to consumers (allowing more people to purchase.
22. The 4 factors of production are:
Answer:
• Natural Resources
• Human Resources (Labour)
• Capital Resources
• Other Parts (Entrepreneurship)