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Scarcity
The fundamental economic problem resulting from limited resources and unlimited wants.
Economic problem
Occurs when there are finite resources available to supply infinite wants.
Opportunity cost
The cost of giving up the next best alternative.
Trade-offs
Competing alternatives that are given up when making a choice.
Resources
Inputs used to produce goods and services that are limited in supply.
Unlimited wants
A condition where people's desires for goods and services exceed the available resources.
Allocation of resources
The process of distributing limited resources among various uses.
Production possibility diagrams
Graphical representations showing the maximum combinations of goods that can be produced with available resources.
What to produce?
One of the three key questions in economics addressing what goods and services should be made.
How to produce?
One of the three key questions determining the methods and processes for production.
Who to produce for?
One of the three key questions that defines who will receive the goods and services produced.
Trade-off example
Choosing between buying a Pepsi or a Fanta, where choosing one means forgoing the other.
Gareth and Liz's allotment decision
An example of resource allocation where choices must be made between growing only vegetables or flowers, or a combination.
Government spending
An example of how opportunity cost can be applied in public finance decisions.
Scarcity examples in media
Recent news stories that illustrate the concept of scarcity in various contexts.
Learning objectives in economics
Goals set for understanding key economic principles, including scarcity and opportunity cost.
Economic methodology
The framework and methods used to analyze economic problems and phenomena.
Opportunity cost in decision-making
The concept used to weigh alternatives based on the value of the next best option not chosen.
Finite resources
Limited quantities of inputs available to meet unlimited wants.
Basic economic problem
The need to make choices due to scarcity of resources.
