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Questions and Answers
What are some examples of decisions that involve choices between alternative uses of limited resources?
Examples include deciding whether to go to a concert or stay at home, continue education or get a job, have a relationship or focus on studies, invest in shares or keep savings in the bank, decide what products to produce, choose between advertising mediums, allocate resources to different sectors (childcare centers, sport, roads, national defense), and decide on free trade or protectionism.
What factors should be considered when making decisions about resource allocation?
Factors to consider include the opportunity cost of each choice, the potential benefits and drawbacks of each option, the specific goals and priorities of the decision-maker, the available resources, the external factors such as market demand and competition, and the long-term impact of the decision on individuals and society.
What are the potential consequences of choosing self-sufficiency in production of goods and services?
Potential consequences include higher costs of production, limited access to a diverse range of products and services, reduced competition and innovation, potential inefficiencies in production, and the need for protectionist measures to shield domestic industries from international competition.
