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The Economic Problem
THE MARKET AND ALLOCATIVE EFFICIENCY (3.1)
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THE MARKET AND ALLOCATIVE EFFICIENCY (3.1)
Define the following terms:
allocative efficiency
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economic problem
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economy
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human resources
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natural resources
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productive efficiency
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2. Classify the following resources as to whether they are human, natural or capital resources.
human
natural
capital
tractor
Boeing 747
lawyer
The Economic Problem
river
trees
paper
3. Describe how resources are allocated to produce goods and services in New Zealand.
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4. Classify the following goods as scarce or not scarce.
scarce
not scarce
sand
fresh water
Exercise 1.1
air
unskilled workers
time
5.
Economic goods are called scarce goods because they:
a. are not available in sufficient quantities to satisfy the wants for them.
b. are not produced in sufficient quantities to satisfy the effective demand for them.
c. are of high quality and so are in relatively short supply.
d. are of primary importance in satisfying the needs of a society.