Basic economic problem Flashcards
what is the basic economic problem?
how to allocate scarce resources to satisfy unlimited needs and wants
difference between economic good and free good
an economic good is one that is limited in supply
a free good is unlimited in supply
who are the three main economic agents or decision makers in an economy?
individuals or households
firms
the government
difference between needs and wants
needs are the essential goods required for human survival
wants are goods and services that are not necessary but are of personal choice
what are the four factors of production?
Land
labour
capital
enterprise
the three sectors of an industry are ?
primary
secondary
tertiary
define opportunity cost
cost measured in terms of the next best alternative forgone
PPC is a representation of ?
productive capacity ie the maximum output
