LO:
a) the problem of scarcity - where there are unlimited wants and finite resources
b) the distinction between renewable and non-renewable resources
c) the importance of opportunity costs to economic agents (consumers, producers and governments)
a) the problem of scarcity - where there are unlimited wants and finite resources
b) the distinction between renewable and non-renewable resources
c) the importance of opportunity costs to economic agents (consumers, producers and governments)
a) The problem of scarcity
Basic economic problem: How to allocate scarce resources among alternative uses. Wants are infinite, but there are finite resources with which to satisfy them. Scarce resources = a decision must be made (what, how, why and for whom goods and services are produced) |
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b) renewable and non-renewable resources
renewable resources: natural resources that can be replenished
non-renewable resources: natural resources that once used cannot be replenished
renewable resources: natural resources that can be replenished
non-renewable resources: natural resources that once used cannot be replenished
c) the importance of opportunity costs
Task
- Which handset would you want and why?
- If this was out of stock, what would be your second choice?
Source: http://www.ukmobilephonenetworks.com/Three_Mobile_deal_of_the_month.html
Opportunity cost: the benefit foregone from the next best alternative
So, what does this actually mean? Benefit forgone = the positive factors you have lost out on Next best alternative = the second best option you could have chosen (e.g. choosing Pepsi instead of Coca Cola) Opportunity costs occur because resources are scarce therefore choices have to be made Source: http://www.economicshelp.org/blog/142/economics/what-does-the-government-spend-its-money-on/
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