the economic problem

• What is microeconomics primarily concerned with?


  How to best solve the basic economic problem
• What is the basic economic problem described in microeconomics?


  How to allocate scarce resources given unlimited wants
• What are the four types of resources in economics?

  Capital, enterprise, land, and labor
• What does "capital" mean in economics?


  Man-made aids to production
• Give examples of capital in economics.


  Machinery, tractors, vehicles, factories, and computers
• Who are considered "enterprise" in economics?


  Risk takers who innovate and produce goods and services
• What is meant by "land" in the context of factors of production?


  Natural resources like farmland and rainforests
• What does "labor" refer to in economics?


  Human resources or workers that produce goods and services
• What are the three fundamental choices in economics regarding resource allocation?


  • What to produce
  • How to produce it
  • For whom to produce
• How do businesses decide what to produce in a market economy?


  Based on consumer demand
• How do businesses determine how to produce goods and services?


  By choosing the most cost-effective and productive methods
• Who decides for whom to produce in a market economy?


  Those who have enough income to afford goods and services
• What is the concept of opportunity cost in economics?


  The cost of the next best alternative foregone when a choice is made
• How do we measure whether a choice made in economics is a good or bad decision?

  By comparing the value of the current choice to the opportunity cost
• What should be done if the value of the opportunity cost is greater than the value of the current choice?


  Allocate resources towards the opportunity cost instead
• What is the significance of opportunity cost in economics?


  • Measures the value of choices made
  • Helps determine if decisions are good or bad
  • Guides resource allocation decisions
• What is resource scarcity?


  It occurs when the demand for a resource exceeds the available supply
• What are the implications of resource scarcity on economic prosperity?


  It can lead to unsustainable economic growth and higher levels of inequality
• What are the types of factor inputs in economics?


  Land, labor, capital, and enterprise
• What is the economic problem related to resource scarcity?


  • Tough decisions on resource allocation
  • Limited resources vs. unlimited wants and needs
• What are the four main causes of growing resource scarcity?


  Growing demand, high extraction rates, structural scarcity, and lack of substitutes
• What is demand-induced resource scarcity?


  It occurs when demand for a resource increases rapidly
• How does population growth contribute to resource scarcity?


  It increases pressure on natural resources
• What role does increasing prosperity play in resource scarcity?


  It leads to increased ownership and use of resource-intensive consumer goods
• What is the significance of sustainability in relation to natural capital?


  It focuses on the long-term viability of natural resources
• What is Earth Overshoot Day?


  It marks the day when humanity has used more natural resources than the Earth can replenish in a year
• What does the term "water stress" refer to?


  It indicates the pressure on water resources due to high demand
• Which countries face extremely high levels of baseline water stress?


  17 countries home to one quarter of the world's population
• Which city had the highest water stress score in 2018?


  Chennai, India
• What is a classic example of water scarcity in a city?


  Cape Town's water shortage
• What are some potential government interventions to address water scarcity?


  • Build new reservoirs and dams
  • Implement water pricing and quotas
  • Introduce tougher regulations on water efficiency
  • Encourage shifts to less water-intensive crops
• What is one short-term solution to water scarcity?


  Building new reservoirs
• Why might governments charge more for water?


  To encourage conservation and efficient use
• What is the relationship between water pricing and inequality?


  Those least able to afford water often pay a higher proportion of their income
• What is the simplest form of Economics?


  Economics is about satisfying infinite desires using limited resources.
• What are some basic needs everyone has?


  Food, water, and a place to live.
• Why are resources considered scarce?


  There is a limited amount of resources available to satisfy needs and wants.
• What is the basic economic problem?

  How to effectively use scarce resources to satisfy infinite needs and wants.
• What are the four factors of production?


  • Land
  • Labour
  • Capital
  • Enterprise
• What does 'land' include in the context of factors of production?


  Natural resources in and on the Earth, including renewable and non-renewable resources.