THE NATURE OF THE ECONOMIC PROBLEM CHAPTER 1

Question 1

Define Scarcity

Answer 1

Unlimited wants exeed limited resourcses which leads to the economic problem.

Question 2

Define wants

Answer 2

Unlimited desires for luxary goods and services.

Question 3

Define needs

Answer 3

Limited goods essential for living.

Question 4

Define opportunity cost

Answer 4

The next best alternative forgone.

Question 5

Define resources

Answer 5

Anything that can be put to productive use.

Question 6

Define economic goods

Answer 6

Any goods and services that requires resources to produce and has an opportunity cost.

Question 7

Define Free goods

Answer 7

Any good that requires no resources produce and has no opprtunity cost.

Question 8

State 2 differences between economic goods and free goods

Answer 8

Economic goods have an opportunity cost while free goods dont.

Free goods dont require resources to produce while economic goods require resources to produce.