Unit One - The Basic Economic Problem Flashcards
1
Q
What is the Basic Economic Problem?
A
Scarcity
2
Q
What are Merit Goods?
A
Goods which are so important that society believes that they should be free at the point of use.
3
Q
Examples of Merit Goods?
A
Healthcare, firefighters, education…
4
Q
What are Public Goods?
A
Goods which the producer cannot prevent the public from benefiting from, even though they refuse to pay for them.
5
Q
Examples of Public Goods?
A
Lighthouses, defence, public displays…
6
Q
Why will scarcity never be eliminated?
A
Humans will always want something else - we have unlimited wants and limited resources. We want things to make life more enjoyable. The things we use to produce the things we want (a.k.a natural resources) are limited and running out fast due to a constant, worldwide demand.
