Theme 1.1 Scarcity as the Central Economic Problem Flashcards
1
Q
how does scarcity come about?
A
scarcity arises from limited resources and unlimited wants
2
Q
what can we imply from scarcity?
A
we can imply that choices will have to be made in the allocation of resources
3
Q
what is the definition of opportunity cost?
A
the value of the next best option forgone
4
Q
what are the three economic agents
A
Producers, Consumers and Government
5
Q
what is the objectives of economic agents
A
consumers to maximise utility (satisfaction), producers to maximise profits and government to maximise social welfare
6
Q
what must economic agents do before making decisions?
A
weigh the costs and benefits, intended and unintended consequences as well as gather information
7
Q
A
