1.1 The problem with the economy is the
lack of resources available which is to a
high demand. People always want more
resources even though they are limited.
1.2 Scarcity, or limited resources, is one of the most basic economic
problems we face. We run into scarcity because while resources are
limited, we are a society with unlimited wants. Therefore, we have
to choose. We have to make trade-offs. We have to efficiently
allocate resources. We have to do those things because resources
are limited and cannot meet our own unlimited demands.
2 Choices and Trade Offs
2.1 Making a choice made normally involves a trade-off – this
means that choosing more of one thing can only be achieved
by giving up something else in exchange.
2.1.1 This can be through housing, in which people
are making the choice about whether to rent
or buy a home – both decisions involve risk.
People have to weigh up the costs and benefits
of the decision.
2.1.2 Working is taken into concideration when working
full or part time.
2.1.3 Transport and Travel is questioned by ensuring that you
have selected the ebst possible form of transport. This
may be based on time and cost that it is nedded to be
3 Opportunity Cost
3.1 The opportunity Cost is the sacrifice of
something to gain something else. It is used in
order to gain the best thing by giving up the
second best thing
3.2 A benefit, profit, or value of something that must be
given up to acquire or achieve something else. Since
every resource (land, money, time, etc.) can be put to
alternative uses, every action, choice, or decision has an
associated opportunity cost.