3) The economic problem Flashcards
1
Q
What is the basic economic problem?
A
Scarcity, infinite wants but finite resources
2
Q
What are the 3 questions of resource allocation?
A
1) What to produce
2) How to produce it
3) Who to produce it for
3
Q
What are the 4 methods of resource allocation?
A
1) By Markets
2) By governments
3) By households
4) By “the commons”
4
Q
What are the 4 factors of production?
A
1) Land
2) Labour
3) Capital
4) Enterprise
5
Q
What is opportunity cost?
A
Opportunity cost is the benefit forgone as a result of not choosing the next best alternative
