Basic Economic Problem Flashcards
1
Q
What is the basic economic problem
A
How to allocate scarce resources given unlimited wants
2
Q
What are the factors of production
A
Capital
Enterprise
Land
Labour
3
Q
What is an opportunity cost
A
The cost of the next best alternative forgone when a choice is made
4
Q
What is pareto efficiency
A
No one can be made better off without someone being made worse off
5
Q
How does the ppf curve shift
A
Increase in the quantity or quality of factors of prod
