Chapter-1 Flashcards
The nature of the economic problem (5 cards)
1
Q
What are resources?
A
Resources are factors used to produce goods and services.
2
Q
What is the economic problem?
A
The economic problem arises when unlimited wants exceed finite resources.
3
Q
What is scarcity?
A
Scarcity is a situation where there is not enough to satisfy everyone’s wants.
4
Q
What are economic goods?
A
Economic goods are products which require resources to produce and therefore has an opportunity cost.
5
Q
What are free goods?
A
Free goods are products which does not require any resources to produce and therefore does not have an opportunity cost.
