Chapter 1- the basic economic problem

Resources

The factors required to produce goods or services

The economic problem

Unlimited wants exceeding finite resources

Scarcity

a situation where there is not enough to satisfy everyone's wants

Wants

Desires of goods and services

Economic good

A product which requires resources to produce it therefore has a opportunity cost.

Free Good

A product which does not require any resources to make it so it does not have an opportunity cost

Why does scarcity exist

There are insufficient resources to produce all the products people want

Why will scarcity continue to be a problem in the future

Wants of people will continue to increase

It is not possible to eliminate _______________ as _____________________ grow faster than economic resources

scarcity, wants

the economic problem means people have to make____________________

Choices

Similarities between finite resources and infinite wants

Both give rise to scarcity