Finite resources and unlimited wanted(Chapter 1)

Question 1

Economic Problem

Answer 1

The economic problem is that resources are finite although human need and wants are endless

Question 2

Finite resources

Answer 2

Resources are scarce and there is only a limited amount of FOP in the world, with the growing population of the world. Resources are valuable because they are used a lot in production, they are the input for all production.

Question 3

Definition of wants and needs

Answer 3

Needs – limited but essential for life and survival

Wants – unlimited and non-essential, provide satisfaction

Question 4

Scarcity

Answer 4

Scarcity in economics refers to when the demand for a resource is greater than the supply of that resource, as resources are limited. Scarcity results in consumers having to make decisions on how best to allocate resources in order to satisfy all basic needs and as many wants as possible. Scarcity is the foundation of the economic problem: the allocation of limited means to fulfill unlimited wants and needs.