the basic economic problem

Question 1

wants

Answer 1

Wants are goods and services we would like to have that make life more enjoyable. However, they are not essential for survival.

Question 2

needs

Answer 2

something essential for survival

Question 3

relative scarcity

Answer 3

Relative scarcity is the basic economic problem where the resources available for production are limited, relative to society’s unlimited wants. Because resources are limited, society must make choices between alternative uses or types of production.

Question 4

resoruces

Answer 4

Resources are productive inputs including natural, labour and capital resources (also called factors of production) that are used by firms to make or supply other goods and services

Question 5

natural

Answer 5

naturally occuring outputs used in the production process eg. timber or wheat

Question 6

labour

Answer 6

people that provide their skills, efforts and knowledge to the bussiness eg employees

Question 7

capital

Answer 7

refer to the tools and machinery that are used to produce goods and perform services eg westborune

Question 8

high price

Answer 8

scarce

Question 9

low price

Answer 9

abundant (around a lot)

Question 10

zero price

Answer 10

not scarce at all

Question 11

productive capacity

Answer 11

Productive capacity represents the physical limits on the value of a nation’s output of goods and services. Its level reflects the quantity and quality of resources available. It is represented by the PPF on a PPD.