1.1.3 The Economic Problem

Question 1

The Problem of Scarcity

Answer 1

human wants and needs are virtually limitless, while resources to satisfy them are limited.

Question 2

Limited Resources

Answer 2

Resources like land, labor, capital, and time are limited in supply.

Question 3

Unlimited Wants

Answer 3

People desire more goods and services than can be produced with available resources

Question 4

Choices and Trade-offs

Answer 4

Scarcity necessitates making choices and trade-offs due to limited resources.

Question 5

Opportunity Cost

Answer 5

Opportunity cost is the value of the next best alternative foregone when a choice is made.
It represents the true cost of a decision in terms of forgone opportunities.

Question 6

Renewable Resources

Answer 6

Renewable resources can be replenished naturally over time.
They include resources like solar energy, wind energy, forests, and fish stocks.

Question 7

Non-Renewable Resources

Answer 7

Non-renewable resources cannot be replaced naturally within a human timescale.
Examples include fossil fuels (coal, oil, natural gas), minerals (e.g., iron, copper), and nuclear fuel.