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The Economic Problem andEconomic Systems
- Essay length: 2734 words
- Submitted: 08/01/2009
The first 200 words of this essay...
GCSE Economics Revision Notes
The Economic Problem
The Economic Problem
Economics is a social science which studies how humans behave when faced by the economic problem of scarcity.
Economic problem = human wants for goods and services are unlimited, but resources for producing goods and services to satisfy the wants are limited.
Reasons for unlimited wants include
* Most goods wear out over time and need replacing - eg food, clothes, furniture
* New goods and services are invented creating new wants - eg personal computers, games consoles
* Human greed
Resources at any moment in time are limited because of the restrictions of the Earth.
Renewable resources = resources that can be replaced (eg vegetation and people).
Non-renewable resources = resources that can only be used once and will ultimately run out (eg fossil fuels, mineral ores). Some of these resources can be recycled.
Free good = a good that is not scarce, so is available in sufficient quantity to satisfy all human wants (eg air).
If all goods and services are free, the economic
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