the world’s resources are finite therefore they are scarce
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In terms of resources
individuals, firms, governments and international agencies – can only obtain a limited amount at a given time
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Economic Goods
Scarce resources
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Free Goods
Non scarce goods - no money spent on it e.g. Air
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Free goods -> Economic Goods
This happens why population rises or production increased
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The basic problems
Wants are unlimited yet resources are scarce
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Allocation of resources
a choice has to be made - Choices can be graded in terms of benefits - one is the best choice However the next best alternative is lost: opportunity cost of the choice
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Opp cost for conumers
what has to be given up when spending on an item? E.g. opp. cost of a chocolate bar = packet of crisps
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Opp cost for producers
investment may affect workers’ wages E.g. opp. Cost of buying a machine may be 3 years wages of 4 workers
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Opp cost for governments
the opp. Cost of buying a fighter jet may be building two new primary schools
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Other cards in this set
Card 2
Front
In terms of resources
Back
individuals, firms, governments and international agencies – can only obtain a limited amount at a given time
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