3.1.1.4 Scarcity, choice and the allocation of resources
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8 Terms
What is the central purpose of economics activity?
The production of goods and services to satisfy needs and wants.
What does scarcity require?
Choices on the careful allocation of scarce resources
What are different forms of economic activity?
making of goods (physic products) and provision of services (intangible)
Consumption
What are the key economic decisions?
What to produce?
How to produce it?
Who to produce it for?
What are producers and what do they decide?
firms/people that make goods+services
decide what to make + how much to sell it for
What are consumers and what do they decide?
people/firms that buy goods/services
Decide what to buy and how much they are willing to buy it for
What is the government and what do they decide?
organisation that sets the rules that participants in the economy have to follow
decide how much to intervene in the way consumer + producer act
What is opportunity cost?
The next best alternative you are giving up when making a decision