1.1 The Economic Problem Flashcards
(4 cards)
1
Q
What is an economic good ?
A
Economic goods - goods which use scarce resources to produce, there is a limit to what can be produced and there is an opportunity cost associated producing these. e.g phones
2
Q
What is a free good ?
A
free good - is a good which is available with no opportunity cost and does not use scarce resources to produce e.g sunlight NOTE: free good is not a good at 0 cost
3
Q
what is the economic problem ?
A
the coexistence of scarce resources and infinite wants requires choices abour what, how and for whome to produce for, to achieve an efficient allocation of scarce resources
4
Q
what is opportunity cost
A
opportunity cost is the next best alternative forgone when making an economic decision
