Basic economic problem

• The Basic Economic Problem

  Scarcity (a situation where people have limited resources to satisfy unlimited wants)
• Scarcity


  • Reflects an imbalance between the limited resources and unlimited wants
  • Resources have different alternative uses
• Human wants are unlimited because humans are greedy by nature
• Once some wants are satisfied, other immediately appear
• Examples of limited resources


  • Soil
  • Oil
  • Petroleum
  • Gold
  • Diamond
  • Forests
  • Fish
• Resources


  Limited and finite, but can be used in many different commercial and personal ways
• Use of soil


  • For agricultural purpose
• The basic Economic Problem is a common problem faced by everyone, whether rich or poor, and is forced by individuals, workers, firms
• Individual


  • A student with a packet of $50 wants to buy a cake or a drink each costing $10