- The economic problem is limited resources in relation to people's desires and wants.
- The economic problem results from scarcity.
- Scarcity results in the need for choice.
- Whenever a choice has to be made there is an opportunity cost.
- The opportunity cost of any decision is the next best alternative foregone.
- Economist generally assume that people are rational, choosing the best alternative available.
- Scarcity, opportunity cost and choice can be…