The Basic Economic Problem

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

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Opportunity Cost

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

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Limited Resources

  • Oil
  • Food
  • Gas
  • Houses/Land
  • Clean Water
  • Metal
  • Medicine
  • Wood
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Factors of Production

  • 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.
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