The Basic Economic Problem

What is the basic economic problem?

• the value forgone from the next best alternative

• the fact that the world has finite resources but humans have infinite wants

• too many resources

• the fact that the world has infinite resources but humans have finite wants

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

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

Which of the below would the government include in their budget?

• Healthcare spending

• Police spending

• Education spending

• Public transport spending

Define scarcity

• The infinite availability of resources

• The cost of making a decision

• Oil

• The limited availability of resources

Which of the below is included in our definition of economics?

• the distribution of resources

• the choosing of resources

• the production of resources

• the consumption of resources