The Basic Economic Problem

A situation that arises when people have unlimited wants in the face of limited resources.

In decision making, the vaue of the next-best alternative forgone.

• Land - Natural resources e.g. coal, oil, food. Some are renewable and ther are non-renewable.
• Labour - Human effort involved in production.
• Capital - Manmade aids e.g. machinery, IT.
• Enterprise - Risk and ideas.