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Economic Problem

The document discusses the basic economic problem of scarcity, highlighting that resources are finite while human wants are infinite. It explains the factors of production, which include land, labor, capital, and enterprise, and emphasizes the importance of making efficient choices in resource allocation. Additionally, it introduces concepts like economic goods, opportunity cost, and production possibility curves.

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bondhukharap
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6 views15 pages

Economic Problem

The document discusses the basic economic problem of scarcity, highlighting that resources are finite while human wants are infinite. It explains the factors of production, which include land, labor, capital, and enterprise, and emphasizes the importance of making efficient choices in resource allocation. Additionally, it introduces concepts like economic goods, opportunity cost, and production possibility curves.

Uploaded by

bondhukharap
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 15

MANAGERIAL

ECONOMICS
The Basic
Economic
Problem
2
• The Nature of
Economic Problem
-Scarcity
The basic economic problem is that resources
are scarce
In economics, these resources are called
the factors of production

3
◆ Finite Resources & Unlimited Wants

•
“
There are finite resources available in relation to the infinite wants
and needs that humans have
• Needs are essential to human life e.g. shelter, food, clothing
• Wants are non-essential desires e.g. better housing, a yacht etc.

• Due to the problem of scarcity, choices have to be made by


producers, consumers, workers and governments about the best (most
efficient) use of these resources

4
◆ Resources: are the inputs required for the production of goods

“
and services.
◆ Economic goods are those which are scarce in supply and so
can only be produced with an economic cost and/or consumed
with a price. In other words, an economic good is a good with
an opportunity cost. All the goods we buy are economic goods,
from bottled water to clothes.
Free goods, on the other hand, are those which are abundant
in supply, usually referring to natural sources such as air and
sunlight.

5
◆
“
https://www.youtube.com/w
atch?v=8X03VasFY38
◆ Wants and Needs with Bert
and Ernie | Financial
Education
◆ Example of PRESENTATION
1

6
“
◆ The Factors of Production
◆ Resources are also called ‘factors of
production’ (especially in Business).

7
• Economics is the study of scarcity and
its implications for resource allocation
in society

8
The Factors of Production
Factors of production are the resources used to produce goods
& services
• Land, labour, capital & enterprise

The production of any good/service requires the use of a


combination of all four factors of production
• Goods are physical objects that can be touched (tangible) e.g.
mobile phone
• Services are actions or activities that one person performs for
another (intangible) e.g manicure, car wash
9
The Four Factors of Production

10
Opportunity Cost

11
https://www.youtube.com/watch?v=XOT1GhiVEC4

Opportunity Cost - A Short Film

Example of PRESENTATION 1

12
Production Possibility Curves (PPC)

13
PPC Graph

14
Economic growth &
PPC

15

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