Definitions CH 1-4

Question 1

The Basic Economic Problem

Answer 1

How to best allocate scarce resources in order to people’s unlimited needs and wants

Question 2

Economic Agents

Answer 2

Households (private individuals in a society) , firms that operate in the private sector of the economy, and the government (Public sector)

Question 3

Private sector

Answer 3

economic activity of private individuals and firms. The private sector’s main aim is to earn profit for its owner’s

Question 4

Public sector

Answer 4

Economic activity directly involving the government, such as the provision of state education and healthcare services. The public sector’s main aim is to provide a service