Intro to Economics and distributing resources

is the study of how individuals, organisations and governments make choices about how to allocate limited resources

• Economics

• The Economy

• Economic system

• Economic resources

The cost of the option forgone

• Opportunity cost

• Financial cost

The cost in money terms

• Opportunity cost

• Financial cost

What is the basic economic problem?

• our needs and wants are unlimited but resources are limited

• our needs and wants are limited but resources are unlimited

• our resources are unlimited but needs and wants are limited

• our resources are limited but needs and wants are unlimited

Tick the examples of needs

• Latest phone

• Holiday

• Food

• Housing

• Clothes

Tick the examples of wants

• Latest phone

• Holiday

• Food

• Housing

• Clothes

The economic resources necessary to produce goods and services can be divided into four categories known as the Factors of Production:

• Land

• Labour

• Capital

• Enterprise

• Interest

The reward for the FOP Land is

• Rent

• Interest

• Wages

• Profit

The reward for the FOP Labour is

• Rent

• Interest

• Wages

• Profit

The reward for the FOP Capital is

• Rent

• Interest

• Wages

• Profit