The Economic Problem

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  • The Economic Problem
    • Scarcity
      • Not all resources are scare e.g. air, these are free goods.
        • With population growth has changed some resources from free goods to economic goods.
        • With deforestation and air pollution means air may become an economic good.
  • Infinite Wants
    • The Economic Problem
      • Scarcity
        • Not all resources are scare e.g. air, these are free goods.
          • With population growth has changed some resources from free goods to economic goods.
          • With deforestation and air pollution means air may become an economic good.
  • The Basic Problem
    • 'Resources are scarce but Wants are infinite.'
  • We live in a global village with FINITE resources.
    • Means that there are only limited amounts of land, water, oil, food and other resources on Earth.
      • Scare resources are called economic goods.
        • Physical and Mentally, e.g. food, water, shelter, heat, clothing, love and self-esteem.
          • People have a limited number of needs to survive.
            • Infinite Wants
          • People have a infinite wants whatever their background.
            • Wants include more food, larger housing, longer holidays etc.
          • Wants include more food, larger housing, longer holidays etc.
          • Free goods have no opportunity cost. No resources are being sacrificed when the good is consumed.
            • Creating an opportunity cost

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