1.1 the nature of the economic problem

Question 1

define the economic problem

Answer 1

• unlimited needs and wants exceeding finite resources
• scarcity of resources

Question 2

define a free good

Answer 2

• product which does not require any resources to make
• no opportunity cost

Question 3

define an economic good

Answer 3

• product which requires resources to produce
• has opportunity cost due to limited supply

Question 4

define resources

Answer 4

• factors used to produce g/s

Question 5

define scarcity

Answer 5

• a situation where there is not enough to satisfy everyones wants

Question 6

define wants

Answer 6

desires for goods and services