1.1.3 the economic problem

Question 1

Scarcity

Answer 1

-resources to satisfy unlimited wants and needs are limited
-Must thus make trade-offs and choices
-Every choice involves an opportunity cost - the value of the next best alternative foregone

Question 2

Renewable vs non-renewable resources

Answer 2

-Depletion of non-renewable resources can lead to rising prices and economic challenges
-leads to insecurity

Question 3

Importance of opportunity costs

Answer 3

-Consumers make choices of money and time - informed decisions

-Producers aim to maximise profits - production decisions

-Govs allocate budgets to programmes and policies