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1

The basic economic problem

How to allocate scarce resources to satisfy unlimited needs and wants.

2

The chain of production

Describes how businesses from the primary, secondary and tertiary sectors work interdependently to make a product and sell it to the final customer.

3

Economic agents

Households (private individuals in society), firms that operate in the private sector of an economy and the government (the public sector of an economy).

4

Economic goods

Those which are limited in supply

5

Free goods

Goods which are unlimited in supply, such as air or sea water

6

Goods

Physical