The nature of the basic economic problem

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Description and Tags

Economics

IGCSE Economics

CIE

The basic economic problem

5 Terms

1
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Economic Problem

When there exist unlimited wants but limited resources to satisfy those wants this creates scarcity

2
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Scarcity

Limited Resources to satisfy everyone wants

3
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Resource allocation decision

  1. What to Produce

  2. How to Produce

  3. Who to produce for


4
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Economic Good

Takes resources and labour to produce and has a opportunity cost

5
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Free Good

Is provided naturally from nature and has no opportunity cost