1a) Scarcity, choice and opportunity cost Flashcards
1
Q
What is the fundamental economic problem?
A
When human wants are unlimited but resources are scarce. causing people to make choices.
2
Q
What is the meaning of Scarcity?
A
A situation in which resources are not enough to fulfill wants and needs, causing the inevitability of choice.
3
Q
What is the meaning of ceteris paribus?
A
“other things remain equal”, allows economists to simplify a situation.
4
Q
Aim of firms, individuals, and economics?
A
1) Profit maximization
2) Maximum satisfaction
3) Maximum welfare
5
Q
What factors can change in the short run?
A
labour
6
Q
What factors can change in the long run?
A
land, labour, capital, enterprise
7
Q
What factors can change in the very long run?
A
land, labour, capital, enterprise, demographics, technology
