The basic economic problem

What you will be able to do

1. I can define the basic economic problem and give examples of scarcity for consumers, workers, firms and governments.

   Syllabus K343, 1.1.1. Finite resources and infinite wants: definition of the basic economic problem; the concept of scarcity; examples of the basic economic problem in the context of: consumers, workers, producers/firms, governments

   Taught in Scarcity: the basic economic problem

2. I can state the three resource allocation questions: what to produce, how to produce it, and who gets it.

   Syllabus K343, 1.1.2. Resource allocation decisions: what to produce; how to produce; who to produce for

   Taught in What, how and for whom: and goods that are free

3. I can tell an economic good from a free good.

   Syllabus K343, 1.1.3. Economic goods and free goods: the difference between economic goods and free goods

   Taught in What, how and for whom: and goods that are free

4. I can name the four factors of production and the reward each one earns.

   Syllabus K343, 1.2.1. Factors of production and their rewards: definitions of factors of production: land, labour, capital and enterprise; rewards to factors of production: rent, wages, interest and profit

   Taught in The four factors of production and their rewards

5. I can explain what changes the quantity and quality of the factors of production.

   Syllabus K343, 1.2.2. Quantity and quality of factors of production: causes of changes in the quantity and quality of factors of production

   Taught in Changing the quantity and quality of resources

6. I can define opportunity cost and give examples in different settings.

   Syllabus K343, 1.3.1. Opportunity cost: definition of opportunity cost; examples of opportunity cost in different contexts

   Taught in Opportunity cost: the next best alternative

7. I can explain how opportunity cost shapes the choices of consumers, workers, firms and governments.

   Syllabus K343, 1.3.2. The influence of opportunity cost on decision-making: decisions made by consumers, workers, producers/firms and governments when allocating their resources.

   Taught in Opportunity cost: the next best alternative

8. I can define a production possibility curve and draw and read one.

   Syllabus K343, 1.4.1. Production possibility curves (PPC): definition; drawing and interpretation of the PPC diagram

   Taught in Production possibility curves: what the points mean

9. I can explain what a point under, on or beyond a PPC means.

   Syllabus K343, 1.4.2. Points under, on and beyond a PPC: the significance of the location of different production points

   Taught in Production possibility curves: what the points mean

10. I can explain what moving along a PPC shows about opportunity cost.

    Syllabus K343, 1.4.3. Movements along a PPC: the significance of movements along a PPC and opportunity cost

    Taught in Moving along a PPC shows opportunity cost

11. I can explain what shifts a PPC and what the shift means for an economy's growth.

    Syllabus K343, 1.4.4. Shifts of a PPC: causes and consequences of shifts of a PPC in terms of an economy's growth.

    Taught in Shifts of the PPC: growth and decline