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Questions and Answers
Which term refers to the limited availability of resources in the market ?
Which term refers to the limited availability of resources in the market ?
What is the opposite of scarcity?
What is the opposite of scarcity?
Scarcity plays a key role in which field of study?
Scarcity plays a key role in which field of study?
What is the basic fact of life that refers to the existence of a finite amount of resources capable of producing limited amounts of each economic good?
What is the basic fact of life that refers to the existence of a finite amount of resources capable of producing limited amounts of each economic good?
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What would happen if there were no conditions of scarcity?
What would happen if there were no conditions of scarcity?
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Study Notes
Key Concepts in Economic Systems
- Economic systems must solve three fundamental economic problems: what goods to produce, how to produce them, and who benefits from them.
- These problems can be solved through custom and instinct, command and centralized control, or a combination of market signals and government directives.
- Mixed economies blend elements of both market economies and planned economies.
- Scarcity is the basic fact of life that there is a finite amount of resources and limited maximum amounts of each economic good that can be produced.
- Without scarcity, there would be no economic goods, as they are relatively scarce compared to unlimited wants.
- Scarcity includes the limited availability of commodities and an individual's lack of resources to buy them.
- The opposite of scarcity is abundance.
- Scarcity is essential for the proper definition of economics itself.
- Walras' definition of social wealth includes all things, material or immaterial, that contribute to economic goods.
- Social wealth is the result of using limited resources to produce goods and services.
- Economic systems play a key role in solving the problem of scarcity and distributing social wealth.
- The different approaches to economic systems have different methods of addressing scarcity and allocating resources and goods.
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Description
Test your knowledge of the economic problem, the causes of the problem and how it can be solved.
