IGCSE Basic Economic Problem

Why does scarcity exist?

• Each year workers tend to produce less than previously 

• Machines wear out in time

• There are not sufficient resources to meet everyone's wants

• There is a limit to people's wants 

Why will scarcity continue to be a problem in the future?

• Prices will rise

• Resources will always be finite 

• Needs will decrease in the future 

• World population will fall 

Which of these is not a decision which is made to solve the basic economic problem?

• What to produce

• How to produce

• Why to produce

• For whom to produce

What happens every time we make a decision?

• We win!

• We incur an opportunity cost

• We incur an opportunity loss

• We incur an opportunity cost of multiple other options

Scarcity affects how the four ​ (a)   are put to use.

• factors of production

• economic models

• incentives

• trade-offs

EXIT TICKET: Match the following

• Opportunity Cost

• rewards or penalties that influence an individual to make or avoid a specific choice.

• Incentives

• Behind each choice, there is an alternative choice that could have

  been made. The value of that second-best option.

• Economics

• an economic problem of humans having limited resources while

  also having unlimited needs and wants

• Scarcity

• a social science

  that studies how people, acting individually and in groups, decide to use

  scarce resources to satisfy their wants.

A need is

• something we have to have in order to survive

• something we have to have to make our life better

Define opportunity cost

• the value forgone from the all other alternatives

• the value forgone from the next two best alternatives

• the value forgone from the next best alternative

• the value gained from choosing

Which of the below is not scarce resource?

• Oil

• Sea water

• Natural gas

• Gold

_______ is another word for Market Economy. 

• Capitalism 

• Communism