BUSINESS
The-Basic-Economic-Problem

The-Basic-Economic-Problem - The Basic Economic Problem...

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Chapter 1-2 The Basic Economic Problem
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The Basic Economic Problem Individuals and businesses have unlimited wants and needs, but the economic resources they have are limited This mismatch of unlimited wants and needs and limited resources is the BASIC ECONOMIC PROBLEM.
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Scarcity Not having enough resources to satisfy ever need Scarcity Tradeoffs Opportunity Cost Necessitates Results In
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Tradeoffs “Choosing is Refusing” When you decide on one alternative, you give up on (or refuse) the alternatives you might have chosen A tradeoff is when you give up something to have something else
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Opportunity Cost The opportunity cost of choosing one alternative is the value given up by not taking advantage of the next best alternative Opportunity cost is the next best alternative, not all possibilities. Because people’s values differ, the opportunity cost of the same decision may differ from person to person.
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Opportunity Cost Example: Milk cost $4 a gallon and bread cost $2 a loaf.
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