1.1 The Economic Problem & 1.2 PPD

The economic problem arises due to ​ (a)   resources and ​ (b)   wants. Scarcity is a ​ (c)   problem. It exists as a consequence of human ​ (d)   .

• finite
• unlimited
• universal
• greed
• local
• compassion

Match the following factors of production with the definition.

• Enterprise

• Man-made resources

• CAPITAL

• Natural Resources

• Labour

• Business Idea

• Land

• Workforce

Opportunity cost is the next best ​ (a)   ​ (b)   .

• alternative
• foregone

Scarcity is a ​ (a)   condition, whereas shortages are often ​ (b)   .

Scarcity is caused by ​ (c)   wants, whereas a shortage is caused by an ​ (d)   to meet demand.

• permanent
• temporary
• unlimited
• inability

Scarcity is a ​ (a)   concept, whereas a shortage can be ​ (b)   to certain areas or markets.

Scarcity is ​ (c)   resolved due to human nature, whereas shortages are resolved by ​ (d)   prices.

• universal
• limited
• never
• increasing

Economic Goods require ​ (a)   to produce, which means they incur ​ (b)   cost. They will often carry a price.

Free goods are ​ (c)   supplied, and the use of them does not ​ (d)   resources. They do not have a price attached.

• resources
• opportunity
• abundantly
• deplete

A production possibility diagram illustrates the different ​ (a)   of output that can be achieved given the current ​ (b)   available within an economy or firm.

• combinations
• resources

Label what each point on the label represents

a

b

c

Economic Inefficiency

Unattainable

Economic Efficiency

If a firm moves from producing at Point A to producing at Point B, what is the opportunity cost in terms of biscuits.

If an economy moves from producing at Point B to producing at Point A, what is the opportunity cost in terms of Agricultural Goods?