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The Basic Economic Problem - Coggle Diagram
The Basic Economic Problem
What is economic sustainability?
Ensures the most responsible use of scare resources so that a firm or economy can 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 (CPUST- Costs, Price, Unemployment, Spending, Tax)
What is meant by opportunity cost?
Something that is given up when making a
decision on the use of scarce resources.
The value of the next best alternative
when making a decision.
How does the UK approach the basic economic problem?
How should resources be used most efficiently to produce
these goods?
Producers will mostly determine how goods are
to be produced as they look for lowest costs. The government sometimes intervenes with legislation on production.
How should the goods be allocated among the population?
In most circumstances goods and services are allocated to consumers who can afford to buy them.
The government sometimes intervene when goods and services are seen as particularly important to the economy
What goods and services should be produced with available
resources?
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.
What are unlimited wants?
The desire for everything a consumer would like whether they have the resources to purchase it or not. There are too many uses for the resources.
What is the difference between needs and wants?
Wants are unlimited and include anything a consumer would like whether they can purchase it or not. Needs are limited and only consists on what is provided for human survival.
What is social sustainability?
Considers how economic activity (development or growth) affects quality of life and well-being.
It requires that any growth or development meet the basic needs of all, now and into the future, encourages fairness and a better society. It may also consider who benefits within society and who
pays.
What is the basic economic problem?
How to best use the limited resources to satisfy the unlimited wants of consumers.
What should be produced?
How should it be produced?
Whom should it be produced for?
What are scarce resources?
When there are fewer resources to make goods and services than are
desired.
What is environmental sustainability?
Considers how economic activity (development or growth) impacts the environment now and in to
the future.
Focuses on the impact on renewable and non-renewable resources, pollution creation and climate
change, and the availability of future resources.
It is important for all countries and their governments to consider the impact on the environment.