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the economic resources a nation uses to make goods and supply services for its population

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Factors of Production

​Individuals, businesses, and governments must constantly make choices about using limited resources to satisfy unlimited wants.

Scarcity develops when demand is higher than the available resources.

Economic Problem

​Economic Problem

Every economic decision has a cost. Scarcity forces choices to be made. Choosing one option means giving up other options that may have been available. A trade-off is when something is given up in order to gain something else. When a trade-off occurs, an opportunity cost is created. Opportunity cost is the value of the next best option that was not selected. Value is the relative worth of something.

• can help identify the best option

• process of choosing an option after evaluating the available information and weighing the costs and benefits of the alternatives

• can be used by both businesses and individuals

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​Systematic Decision-Making Process