The Basic Economic Problem

The Basic Economic Problem

1. Limited Resources and Unlimited Wants

   • Factors of Production
     • Land
       • all natural resources
     • Labour
       • human resources
     • Enterprise
       • the ability to run a production proccess
     • Capital
       • man made resources which help in production of other things
     • Limited FOP
       • Opportunity Cost
         • PPC
           • Downward Shifting of PPC
             • Wartime
             • Bad Law and Order Situation
               • Reduction in Foreign Investement
             • Outflow of manpower
             • Natural Disaster
             • Less Rainfall (Agricultural Sector)
           • Upward Shifting of PPC
             • Technological Advancements
             • Good Law and order situation
               • Foreign Investment
             • Raising Awareness ( through edu and training will provide efficient labour)
             • Untapped Resources (Discovery of new resources)
             • More Rainfall (Agricultural sector)
           • Where & how to allocate resources to get max benefit
   • Scarcity