Scarcity, choice and opportunity cost, the factors of production, and the production possibility curve.
The economic problem
The basic economic problem is that resources are scarce but human wants are unlimited. Because we cannot have everything, we must choose how to use resources. Every choice means giving something up.
Scarcity arises because finite resources cannot satisfy infinite wants. It forces three key questions on every economy: what to produce, how to produce, and for whom to produce.
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