Scarcity, Choice and The Allocation of Resources Flashcards
1
Q
What is scarcity?
A
A limited amount of resources and unlimited wants
2
Q
Choices have to be made about how scarce resources are allocated between different uses
A
What to produce?
How to produce?
Who to produce for?
3
Q
What is an opportunity cost?
A
Where something is given up when a choice is made
4
Q
What is an economic agent?
A
The people that demand things
5
Q
What is an opportunity costs also referred to as?
A
A trade-off
6
Q
What is an economic good?
A
A good that has an opportunity cost in consumption because it uses up scarce resources
7
Q
What is a free good?
A
One that doesn’t have an opportunity cost in consumption because ut does not use up scarce resources
