1.2 The basic economic problem Flashcards
Need
Something that is necessary for survival
Want
Something a consumer would like to have but is not necessary for survival
Economic problem
How to best allocate limited resources to satisfy the unlimited wants of people
Examples of needs
Food, Water, Shelter
Examples of wants
New phone, Holiday, Car
Opportunity Cost
the next best alternative forgone when making an economic choice
Economic choice
An option for the use of selected scarce resources
Economic sustainability
The best use of scarce resources to ensure responsible growth or development now and in the future
Social sustainability
The development or growth that promotes an improvement in quality of life for all now and in the future
Environmental sustainability
The impact of development or growth where the effect on the environment is small and possible to manage now and into the future.
With scarce resources, decisions have to be made about
What to produce, Whom to produce for and how goods ad services should be produced
