1.1.3 the economic problem Flashcards
1.1 what is the nature of economics?
what creates the economic problem of Scarcity?
when people have unlimited wants, however there aren’t enough resources to supply all the wants.
when does the economic problem occur?
when there are finite resources available to supply infinite or unlimited wants
what is economic activity?
is the production of goods and services to satisfy needs and wants
what affect does the economic activity have on the economic welfare?
it will improve the welfare, the benefit gained by individuals, firms or society in th production of goods and services
what are needs?
thing REQUIRED that are essential to maintain survival
what are wants?
things that are DESIRED but not essential to survival.
what 3 basic questions does the economic problem and activity seek to answer?
- what to produce?
- how to produce?
- who to produce for?
what is renewable energy? examples?
energy from a source that is not depleted when used, such as wind or solar power.
what is non-renewable energy? examples?
energy comes from sources that will run out or will not be replenished in our lifetimes. such as coal or oil.
what is opportunity cost?
what you have to give up to buy what you want.
the loss of other alternatives when one alternative is chosen.
