Economics (AS)·The fundamental economic problem · NSSCAS 1.1a
Scarcity, choice & opportunity cost
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Advanced Subsidiary Economics starts exactly where NSSCO did — but this time we go deeper and sharper. We define the fundamental economic problem precisely, show why scarcity makes choice unavoidable at every level (individuals, firms and governments), and turn opportunity cost into a tool you can use to analyse and evaluate decisions the way the AS examiner expects. We also meet the three basic questions every economy must answer, and one small Latin phrase — ceteris paribus — that you will use in almost every diagram for the rest of the course.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Economics (AS) 1.1a):
- Define the fundamental economic problem
- Explain the meaning of scarcity and the inevitability of choices at all levels (individual, firms, governments)
- Identify the basic questions of what will be produced, how and for whom
- Explain the meaning of the term ceteris paribus
- Analyse and evaluate decisions in terms of opportunity cost
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