BASIC ECON PROBLEM Flashcards
Micro is study of study of
how to best solve basic econ problem
basic econ problem is
How to allocate scarce resources given unlimited wants
whats the problem we have with wants and resources
indi have unlimited wants
but there are not eough resources available on planet to fully satisfy wants
indi have unltd want but not enough resources available on planet to satisfy wants so resources are
scarce
resources aka
FOP
What is capital + examples
man made aids to production e.g machinery , tractors vehicles , factories , computers
what is enterprise about i.e explain it
3 marks
entrepreneurship
about risk takers who innovate and bring about new ideas
to produce goods and services to make profits
what is land + give examples
natural land where goods can be produced or taken from
farmland , rainforests , sea
in terms of land whats example thats really forgotten
sea
what is labour
human resources , workers , who produce goods and service
when resources are comboed they can produce
goods and services
when we allocate what do we want to do
to satisfy as many wants as we can
in econ what needs to be made
choices
Given the basic econ problem what are the 3 fundamental choices to be made of how we allocate scarce resources
What to produce
How to produce
Whom to produce for
in mkt econ waht do bs decide about x based on
consumer demand
in mkt econ apart from consumer demand what else do bs make decisions on
4 marks
whats cost effective and productive to produce
how to and who to produce for
in order to
to minimise use of scarce resources,
which bs survive
bs best at producing at lower costs and minimise use of SCARCE REOSURCES
which bs survive
bs best at producing at lower costs, minimise use of SCARCE REOSURCES
in free mkt who gets g/s
Those with enough Y to afford g/s in mkt
if the allocation of scarce reosurces isnt right wahtll haooen
govt intervention
how can we measure whether decisiosn weve made are good or bad
opp cost
whats the opp cost
Cost of next best alt foregone when a choice is made
we allocate our resources to
choices with the lowest opp cost
what do we put on opp cost
value
how do I know ive made a bad choice
if value of Op Cost is greater than value of current choice
