1.1 The Economic Problem

Question 1

What is an economic good ?

Answer 1

Economic goods - goods which use scarce resources to produce, there is a limit to what can be produced and there is an opportunity cost associated producing these. e.g phones

Question 2

What is a free good ?

Answer 2

free good - is a good which is available with no opportunity cost and does not use scarce resources to produce e.g sunlight NOTE: free good is not a good at 0 cost