1.1 Scarcity

Cards (16)

  • What is the fundamental economic problem that scarcity addresses?
    Unlimited wants, limited resources
  • Scarcity arises because people have unlimited wants but limited resources
  • Scarcity requires individuals and societies to make choices about resource allocation.
  • What is an example of scarcity at the individual level?
    Choosing between a car and vacation
  • Scarcity arises because people have unlimited wants but limited resources
  • What are the two main factors that contribute to scarcity?
    Limited resources, unlimited wants
  • Limited financial resources are an example of capital that contributes to scarcity.
  • What is an example of a natural resource contributing to scarcity?
    Water shortage in a region
  • Unlimited wants refer to the infinite desires of individuals and societies
  • Wants are essential for survival, while needs enhance life but are not essential.
    False
  • What is the fundamental outcome of scarcity for individuals and societies?
    Choices about resource allocation
  • Unlimited wants contribute to scarcity by increasing demand for limited resources.
  • What is opportunity cost defined as?
    Value of best alternative forgone
  • Scarcity necessitates trade-offs because unlimited wants exceed limited resources
  • A market economy promotes efficiency but can lead to inequality.
  • Match the resource allocation method with its characteristic:
    Market Economy ↔️ Resources allocated through supply and demand
    Centrally Planned Economy ↔️ Government controls resource allocation
    Mixed Economy ↔️ Combination of market and central planning
    Traditional Economy ↔️ Based on customs and traditions