Economics: The Economic Problem

What is the primary issue that leads to the economic problem?

Scarcity means something is rare.

What is the aim of any economic activity?

The word 'economics' is derived from a Greek word meaning 'the management of a _______________.

What is the level of economic problem where individuals face limitations on their income?

All goods and services are abundant.

What are the three main choices that society must make due to the economic problem?

Match the following levels of economic problem with their corresponding descriptions:

The concept of opportunity cost is related to the idea that resources have ______________ uses.

Economics is only concerned with the production of goods and services.

The economic problem arises from the fundamental conflict between unlimited wants and scarce resources.
Scarcity refers to a situation where society desires more of a good or service than is currently available.
The economic problem is evident at various levels, including personal, business, national, and international.

Due to limited resources, society is forced to make choices about how to allocate resources.
The three main economic choices are:
- What goods and services to produce?
- How to produce these goods and services?
- For whom to produce these goods and services?
The primary goal of economic activity is to convert resources into goods and services to satisfy human wants.

The concept of opportunity cost is central to economics, as it recognizes that resources have alternative uses.
In choosing to produce one good or service, society must forgo the production of another good or service.
Examples of opportunity costs include:
- Forgoing leisure time to work overtime.
- Allocating resources to build houses instead of sport centers.