Central economic problem
Definition. The central economic problem is that human wants are unlimited while the resources available to satisfy them are scarce, forcing every society to make choices about how to use those resources. It compels decisions on what to produce, how to produce it and for whom to produce.
Scarcity makes choice unavoidable, and every choice involves an opportunity cost. This problem confronts individuals, firms and governments alike, regardless of the economic system in place.
This term belongs to Scarcity and the Central Economic Problem in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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