1.1 - The Basic Economic Problem

Question 1

What is the Basic economic problem?

Answer 1

Unlimited wants exceeding finite resources,

Question 2

What are the types of economic agent and the example of their economic problem?

Answer 2

Individual consumers - Having many wants but limited funds scarcer resources have higher prices.

Individual worker - Overworked and underplayed limited time for leisure employees don’t have resources for this

Firms/Producers - Balancing supply paying workers and profit limited resources available to produce scarce resources cost of production are higher if scarce resources.

Government - Limited revenues to spend on public services gov have to decide if they provide certain goods or services or allow private firms too their decisions for allocation of resources.

Question 3

What are Economic Goods?

Answer 3

Goods that require resources to produce them so they are limited in supply. scarce in relation to the demand for them producers make profit of them. e.g. watches , cars

Question 4

What are free goods?

Answer 4

Goods that require no resources to make them they are abundant in supply not possible t make profit e.g. air water