The Basic Economic Problem
The basic economic problem of the world is the concept of scarcity.
Scarcity is a concept that explains about unlimited want of the people but limited resources
3 Main Questions Of The Economy
What to produce?
How to produce?
From Whom To Produce?
Reasoning behind these queries
What to produce? - A firm or individuals must decide what type of goods and service it shall produce
How to produce? - How do we produce the decided goods and service
For whom to produce? - to produce to consumers of the goods and service
Opportunity cost
Every choice we make has an opportunity cost, which is the value of the next best alternative we forego when making a decision.
Understanding opportunity costs helps us make better choices by considering what we're giving up in the process
How do different economic systems (capitalism, socialism, mixed) address scarcity?
What is the role of opportunity cost in decision-making under scarcity?
How do resources like land, labor, and capital become limited in supply?
How does scarcity affect consumer behavior and demand in the market?
What are the long-term strategies to deal with scarcity in a sustainable way?
How do technological advancements help alleviate scarcity?
What is the connection between scarcity and economic growth?
keywords
Demand and supply
Trade-offs
Wants vs. Needs
Sustainable development
Economic growth
What to produce?
How to produce?
For whom to produce?
Choice and priority