1.2 Scarcity

Need to Know

At the end of this section the student should be able to:

explain how scarcity of economic resources relative to wants
results in choices being made between competing uses of resources; predict possible consequences of these choices
explain how individuals, firms, businesses, non-governmental organisations (NGOs) and the government interact to produce, consume and distribute economic resources
evaluate the opportunity costs involved in economic decisions
made by individuals, firms and the government at local and national levels individuals, firms, the business sector and the government in
economic decisions; describe conflicting incentives with reference to local, national or international examples
differentiate between individual markets and aggregate supply
and demand; explain the difference in focus between micro and macro economics