1.2 Basic economic problem

• What is the basic economic problem?

  Using scarce resources to satisfy wants
• What are scarce resources?

  Insufficient amounts to satisfy all wants
• What are unlimited wants?

  The infinite desire for various resources
• What is a need?

  Something necessary for survival
• What is a want?

  Something desired but not essential
• What choices and decisions must be made to meet consumer wants?

  • Allocate scarce resources effectively
  • Prioritize needs over wants
  • Consider market demands