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Revision Poster 1.2, image - Coggle Diagram
Revision Poster 1.2
The basic economic problem
Unlimited wants is everything a consumer desires even if it is out of their budget.
What is the Basic economic problem?
How should it be produced?
What should be produced?
Who should it be produced for?
How to best use resources to satisfy consumers unlimited wants.
Scarce resources is when there are fewer resources to make goods and services than desired.
The difference between users needs and wants: wants are unlimited, including anything a consumer desires whether they have the resources to obtain it or not.
How the UK approaches the basic economic problem
Most decisions are made based on what consumers are willing and able to buy. The government intervenes in some markets by providing goods directly to consumers.
Producers determine how goods are produced as they look for the lowest costs. The government does intervene sometime on legislation.
In most cases goods and services are allocated to consumers based on who can afford what. The government intervenes based on whether a good or service is particularly important to the economy.
Key Vocab
Sustainability - the ability to be maintained at a given rate
Desired - wished for or intended
Economic - the best use of resources
How economic choices affect us
Economic sustainability ensures responsible use of the most scarce resources, to allow the economy to continue to develop and grow.
Consideration will be given to economic factors such as costs involved in production, price consumer pays, impact on unemployment and impact on government spending and tax revenue. This can be compacted into the acronym CPUST .
Social sustainability considers how economic activity affects quality of life and well-being.
Environmental sustainability considers how economic activity impacts the environment now and into the future. It focuses on the environmental impact on renewable and non-renewable resources.
