Scarcity, choice and opportunity cost Flashcards
1
Q
Define the fundamental economic problem
A
Scare resources but unlimited wants; sometimes called the basic economic problem
2
Q
Define choice
A
Due to scarce resources; individuals, firms and governments have to consider alternatives
3
Q
Define opportunity cost
A
The cost expressed in terms of the next best alternative forgone when a choice is made
4
Q
What are the factors of production and define it
A
Land
Labour
Capital
Enterprise
It is the resources or inputs available in an economy that are used in the production of goods and services
5
Q
What are the basic questions of resources allocation?
A
What to produce?
How to produce?
For whom to produce?
