Section 1.1 The Nature of the Basic Economic Problem Flashcards
1
Q
What is the basic economic problem?
A
Unlimited wants exceeding limited resources
2
Q
What is scarcity?
A
When unlimited wants cannot be satisfied because of limited resources
3
Q
What is a resource
A
Factors used to produce goods and services
4
Q
What are economic goods?
A
A product which requires resources to produce it and therefore has an opportunity cost (usually have to pay for, but price is not a factor)
Example: education
5
Q
What are free goods?
A
A product which does not require any resources to make it and therefore does not have an opportunity cost (usually don’t have to pay for)
Example: air
