 Needs – Goods or services that are essential for living.

ing. These can things such as water, basic food and clothing.
 Wants – Goods and services that people would like to have but are not essential for living. For example, brand name
clothing, expensive food and luxury cars.
 Scarcity (The economic problem) – Unlimited wants but not enough products. The cause of scarcity is because of not
enough factors of production, the 4 factors of production are…

1. Land – Natural resources from nature such as trees, forests and oil
2. Labour – Number of workers available to make products
3. Capital – Money required for a business to produce items this includes machinery, robots etc…
4. Enterprise – Entrepreneurs with skills required to create a business.

Opportunity Cost – A benefit/value that must be given up in order to achieve something else. For example, if a bakery spends money on a
new oven, the opportunity cost of the oven could be a new refrigerator to store cakes