In this topic you will consider the fundamental economic problem: that human wants are unlimited but the resources available to satisfy these wants are scarce.

You will investigate the following concepts:

Scarcity - resources are limited, and scarcity leads to choices having to be made so that resources may be allocated efficiently.  Resources are only ‘scarce’ because humans want more than resources can provide.

Choice - consumers, firms, and governments have to make choices, and there are factors that need to be considered when making choices - including intended and unintended consequences.

Opportunity cost - what is foregone when a choice is made. Opportunity cost can help consumers, producers, and governments make decisions.

Cause and effect - there is a rationale for making decisions, and there are consequences of these decisions on individuals, firms, the economy, and society.