The economc problem(scarcity&choice)

• what are the factors of production?

  • capital
  • enterprise
  • land
  • labour
• Scarcity

  A fundamental economic problem where people have unlimited needs and wants but limited resources
• Choice

  The ability to make decisions about how to use limited resources to satisfy our unlimited needs and wants
• the economic problem is that the world has a lack of resources to meet the needs of the population and this forces choices to be made.

  1. what to produce(businesses decide based on consumer demand)
  2. how to produce(businesses decide based on whats cost-effective)
  3. for whom to produce for(Those who have enough income)
• opportunity cost - the value of the next best alternative forgone when making a choice.