Questions and Answers
It states that human needs are diverse and continuously increasing while resources to satisfy them are relatively limited
Fundamental economic problem
The limit of availability of resources in contrast to unlimited wants
Scarcity
Scarcity leads to ______.
Economic problem
Individuals or economic entities can address the fundamental economic problem by making _____
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It is the effects or consequences of alternative option in an economic choice
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It limits of firms production capacity and necessities making choices on how to best use available resources within this limits
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It affects the firm's operations and profitability and are influenced by market conditions including input prices and product demand
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Refers to the finite nature and availability of resources
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Refers to people's decisions about sharing and using those resourcesrefers to people's decisions about sharing and using those resources
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What is not part of the three coordination task of any economy
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Refers to the peak level of performance that uses the least amount of inputs
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Efficiency is a measurable concept that can be determined using the ratio of useful output to total input
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Allocative efficiencies an efficient market whereby all goods and services met the needs and wants of society.
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People can use cash in exchange for goods
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It is also a part of market exchange because most businesses require people to pay using it
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This system relies on competition to allocate resources efficiently
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Government plays ako significant role in distributing goods and services. This can include subsidies price controls and public services to ensure equitable distribution.
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These are funded through taxations and are available to all citizens.
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This organizations often rely on the nations and volunteer work
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Study Notes
Human Needs and Resource Scarcity
- Human needs are varied and constantly growing, while resources remain limited.
- Scarcity highlights the imbalance between limited resources and unlimited human wants.
- Scarcity drives individuals and economic entities to make choices regarding resource allocation.
Economic Choices
- The impact of alternatives in economic decision-making is crucial.
- Decision-making involves balancing production capacity with resource availability.
- Firms must optimize resource use within their production limits to enhance operations and profitability.
Resource Availability and Decision Making
- Resources are finite, affecting how they can be shared and utilized.
- Individuals and organizations face challenges in resource distribution decisions.
Efficiency in Economics
- Efficiency reflects the peak performance level with minimal input use.
- Measurable efficiency can be quantified using the ratio of useful output to total input.
- Allocative efficiency occurs when goods and services effectively meet societal needs and wants.
Market Dynamics
- Cash transactions are fundamental in market exchanges for goods and services.
- Competition serves as a key mechanism for resource allocation, ensuring efficiency.
Government Role in Resource Distribution
- The government significantly influences the distribution of goods and services through mechanisms like subsidies and price controls.
- Public services funded by taxation aim for equitable resource distribution among citizens.
- Organizations may rely on national resources and volunteer efforts to enhance service delivery.
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