1.2 Scarcity, Choice and Opportunity Cost Flashcards
1
Q
What is scarcity?
A
our resources are scarce because the demand for them is greater than supply.
2
Q
What is opportunity cost?
A
The next best alternative foregone when making a choice- what we give up when we make a choice.
3
Q
What is the primary sector?
A
The extraction of raw materials. e.g. farming, oil extraction.
4
Q
What is the secondary sector?
A
Where raw materials are manufactured into goods. e.g. car manufacture.
5
Q
What is the tertiary sector?
A
The service sector. e.g. banking and tourism.
6
Q
What is the purpose of economics?
A
In economics we try to allocate resources in the best possible way.
