market system

What is the fundamental 'economic problem'?

The economic problem is the issue of scarcity: unlimited wants and needs contrasted with limited resources.

Define 'scarcity' in economics.

Scarcity refers to the basic economic problem that the world has limited, or scarce, resources to meet seemingly unlimited wants.

What are 'wants'?

Wants are desires that people have for goods and services beyond their basic needs, which are often numerous and unlimited.

What are 'needs'?

Needs are essential items required for human survival, such as food, water, shelter, and clothing.

What is 'opportunity cost'?

Opportunity cost is the value of the next best alternative that was not taken when a decision was made due to scarcity.

List the four 'factors of production'.

The four factors of production are land, labor, capital, and enterprise (or entrepreneurship).

What are the three basic economic questions that every society must answer?

1. What to produce?
2. How to produce?
3. For whom to produce?

Why does making a 'choice' create an opportunity cost?

Because resources are scarce, choosing one option means giving up the chance to have the next best alternative, which is the opportunity cost.

What is the fundamental 'economic problem'?

The economic problem is the issue of scarcity: unlimited wants and needs contrasted with limited resources.

Define 'scarcity' in economics.

Scarcity refers to the basic economic problem that the world has limited, or scarce, resources to meet seemingly unlimited wants.

What are 'wants'?

Wants are desires that people have for goods and services beyond their basic needs, which are often numerous and unlimited.

What are 'needs'?

Needs are essential items required for human survival, such as food, water, shelter, and clothing.

What is 'opportunity cost'?

Opportunity cost is the value of the next best alternative that was not taken when a decision was made due to scarcity.

List the four 'factors of production'.

The four factors of production are land, labor, capital, and enterprise (or entrepreneurship).

What are the three basic economic questions that every society must answer?

1. What to produce?
2. How to produce?
3. For whom to produce?

Why does making a 'choice' create an opportunity cost?

Because resources are scarce, choosing one option means giving up the chance to have the next best alternative, which is the opportunity cost.

What is a Production Possibility Curve (PPC)?

The Production Possibility Curve (PPC), also known as the Production Possibility Frontier (PPF), is a graph that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed.

What do points on, inside, and outside the Production Possibility Curve (PPC) represent?

1. Point on the PPC: Represents