Scarcity
What is the basic economic problem?
Scarcity
Define opportunity cost.
What you give up
What do choices involve?
Comparing costs & benefits
Define interdependence
Relying on others
Two sectors Simple Circular Flow Model
Households and Firms
What does scarcity mean
Limited resources, unlimited wants
Bluey's opportunity cost example
Horse/the activity he missed
Why must we make choices?
Scarcity forces decisions
Who relies on consumers
Producers
What do households provide
Labour and expenditure
Name the 4 factors of production
Land labour capital enterprise
Give a personal opportunity coast
Varies per student
Example of a financial choice?
Spend or save money
Who relies on producers
Consumers
What do businesses provide
Goods services income
What can't everyone have everything
Limited resources
Why consider opportunity cost
To make better choices
What helps decide best option
Cost-benefit analysis
Example of interdependence.
Businesses and workers.
What flows between households, firms
Money and resources
Example of Australian scarcity
Water scarcity
What does opportunity cost compare to?
Benefits and sacrifices
What limits our economic choices?
Limited resources
Why is interdependence important?
Supports economic activity
What does circular flow show
Economic interdependence