MICRO - The basic economic question Flashcards
(9 cards)
What is the basic economic problem?
The issue of allocating scarce recourses to satisfy unlimited human wants.
What are the four key economic recourses?
LAND
LABOUR
CAPITAL
ENTERPRISE
Define opportunity cost:
The next best alternative forgone when an economic choice is made.
What are the three fundamental economic questions?
What to produce?
How to produce?
For whom to produce?
What is the difference between wants and needs?
Wants are unlimited, while needs are essential for survival.
Who makes economic decisions?
Decisions are made by the free market, the government, or a mix of both.
What factors affect the cost of healthcare procedures?
Complexity, technology, specialization,
recourses required
Give an example of opportunity cost in government spending.
Spending on healthcare instead of policing means fewer recourses for law enforcement.
What is a positive economic statement?
A statement that is objective and can be tested using evidence.
