1.1.3 - The economic problem

• The basic problem of economics is that of scarcity. People have infinite needs and wants but recourses are scarce
• A renewable resource is resource of economic value that can be replenished or replaced on a level equal to consumption.
• A non-renewable resource is a resource of economic value that cannot be readily replaced by natural means on a level equal to consumption.
• The opportunity cost is the cost of one thing in terms of the next best option which has been given up
• 4 factors to production

  • Land
  • Labour
  • Capital
  • enterprise