1.1.3 The economic problem Flashcards
1
Q
The economic problem
A
Humans have infinite wants but finite resources
2
Q
Opportunity cost
A
Value of the next best alternative forgone when a choice is made
3
Q
Economy
A
A system that tries to solve the economic problem
4
Q
The three questions
A
How to solve economic problem:
What - do we produce?
How - do we produce?
Whom - do we produce for?
5
Q
Factors of production
A
Capital
Enterprise
Land
Labour
6
Q
Non - Renewable
A
Will replenish
E.g. Oil, Gas etc.
7
Q
Renewable
A
Will not replenish
E.g. Solar, Wind etc.
