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What is Economics? TEKS/Notes. UNIT 2. Fundamental Economic Problem facing all societies is scarcity - society not having enough resources to produce all the things people want Unlimited Wants and L imited R esources force societies and individuals to make choices .
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Fundamental Economic Problem facing all societies is scarcity- society not having enough resources to produce all the things people want • Unlimited Wants and LimitedResources force societies and individuals to make choices Scarcity & Choice
Each society must answer three basic questions • 1. What to Produce?-military equipment, food, clothing or housing • 2. How to produce?- Mass production or high labor • 3. For whom to produce?- who gets what • Basic Economic Questions
Trade Offs -Alternatives given up when one option is chosen rather than another. -An exchange of one thing in return for another.
Cost of the next best alternative use of money, time, or resources when one choice is made over another Opportunity Cost Production Possibilities Curve • A diagram representing various combinations of goods and /or services an economy can produce when all production resources are fully employed (P. 123 Figure 1.6)
