Understanding the Basic Economic Problem

Front

Scarcity

Back

Limited resources vs. unlimited wants

Front

Opportunity Cost

Back

Next best alternative foregone

Front

Choice

Back

Deciding between alternatives

Front

Resources

Back

Land, labor, capital, entrepreneurship

Front

Wants

Back

Desires for goods and services

Front

Needs

Back

Essential for survival

Front

Economic Systems

Back

Ways to allocate resources

Front

Production Possibility Frontier

Back

Shows trade-offs and efficiency

Front

Efficiency

Back

Maximizing output from resources

Front

Allocation

Back

Distribution of resources