Scarcity and Choice Flashcards

1️⃣ Familiarise yourself with the flashcards:

  • Look through all the flashcards to see what's on both sides.
  • Make sure you understand the information on each card. If something's unclear, click the link to the revision notes at the bottom of the page for more details.

2️⃣ Test yourself:

  • Look at the question or prompt on each card and try to remember the answer before flipping it over.
  • Check the answer and make a note of any cards you find challenging and need to go over more.

3️⃣ Consistently Review and Practice:

  • Use spaced repetition: spend more time on the cards you struggle with and go over them more often.
  • Regularly review all the flashcards to help you better understand and retain the information over time.

Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

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What is scarcity?

Scarcity is when resources are limited but people’s wants are unlimited.

What is the basic economic problem?

We have unlimited wants and limited resources, so we must make choices.

Why does scarcity lead to choice?

Because we cannot have everything, we must decide how to use our limited time, money, and resources.

What is a trade-off?

Choosing more of one thing means having less of another.

Who makes choices in an economy?

Consumers, producers (firms), and the government.

What are the three economic questions caused by scarcity?

What to produce, how to produce, and for whom to produce.

What does allocation of resources mean?

It means deciding how to share limited resources between different uses.

How does scarcity affect consumers?

They must choose what to buy with limited income and time.

How does scarcity affect producers?

They must choose what to make and how to use limited workers, materials, and machines.

How does scarcity affect the government?

It must choose how to spend tax money, such as on health, schools, or roads.

What are ‘competing wants’?

Different uses that all want the same limited resources.

Does scarcity affect everyone?

Yes. Everyone faces scarcity because time and resources are limited.