1.2 The basic economic problem Flashcards
What is the economic problem?
Its that there are unlimited wants for goods and services but there are only scarce resources to make them.
What are scarce resources?
when there’s a lack of what is needed in order to make goods and services that are desired.
What is meant by unlimited wants?
The infinite desire for something
What is a want?
something a consumer would like to have, but is not a necessity for survival.
What is a need?
Something which a consumer has to have in order to survive.
What are the 3 key questions for reducing the economic problem?
1-what should be produced ?(should resources be used for machinery, consumer goods, or weapons)
2-how should it be produced? (using latest tech or skilled craftsmen)
3-Whom should it be produced for? (should goods and services be allocated to those with most money or those with special needs)
What is meant by opportunity cost?
the next best alternative given up when making a choice
Why are cost and benefits of economic choices weighed against each other?
in order for producers to make the best decisions on how to allocate scarce resources.
What is meant by economic sustainability?
The best use of resources in order to create responsible growth, now and into the future
What is meant by social sustainability?
it considers how an economic choice affects a communities quality of life and well being.
What is meant by environmental sustainability?
it means that our envirmonet is protected so that the earth can support humans and trade now and in the future.
