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Scarcity

 

There are only a limited amount of resources on the planet, e.g.:

 Economists describe these resources as being scarce and call them economic goods. Not all resources are scarce, these are called free goods, e.g.:

 

Infinite wants Humans have a minimum level of needs which are necessary for survival, food, shelter, heat and clothing. Despite this people would rather enjoy a higher standard of living, this is because we all have an unlimited number of wants. The economic problem The fact that resources are scarce and our wants are infinite gives rise to the basic economic problem. How do we decide to allocate the limited resources? Economic agents (individuals, firms, governments etc.) have to make choices regarding what to do with their limited resources.

 

 

 

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