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Quick questions on Scarcity, choice and opportunity cost - TCE Economics (Tasmania)
3short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What are the four resources?Show answer
Economists group productive resources, also called factors of production, into four types. Land is all natural resources, such as Tasmania's farmland, forests and mineral deposits. Labour is human physical and mental effort. Capital is the produced goods used to make other goods, such as machinery, factories and software.
What are the three basic economic questions?Show answer
Every economy, whatever its system, must answer three questions. What to produce, given that we cannot produce everything. How to produce it, choosing between labour-intensive and capital-intensive methods. And for whom to produce, deciding how the goods and services are distributed across the population.
What is the production possibility frontier?Show answer
The production possibility frontier (PPF) is the standard diagram for showing scarcity, choice and opportunity cost. It plots the maximum combinations of two goods an economy can produce when all resources are fully and efficiently employed.
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