1.4 Scarcity, choice and the allocation of resources Flashcards
1
Q
fundamental economic problem
A
how best to make decisions about the allocation of scarce resources among competing uses so as to improve and maximise human happiness and welfare
2
Q
scarcity
A
results from the fact that people have unlimited wants but resources to meet these wants are limited. (people want to consume more goods and services than the economy is male to produce with its limited resources).
3
Q
opportunity cost
A
the cost of giving up the next best alternative eg choosing to watch Eastenders for half an hour on TV, the opportunity cost is the lost opportunity to spend this time reading a book.
