Explain why scarcity results in economic decisions being made.

The concept of scarcity acknowledges that resources in an economy are finite to produce a certain number of goods and services but that individuals needs and wants are unlimited. This results in economic decisons having to be made over what should be produced and consumed in an economy where there is an opportunity cost sacrificing the next best alternative when economic decisons are made. This can be demonstrated using the Production Possibility Frontier Model where 2 goods can only be produced in certain quantities as economic decisions are being made.  

NR
Answered by Naqib R. Economics tutor

2029 Views

See similar Economics IB tutors

Related Economics IB answers

All answers ▸

What are the distinctive characteristics of a perfectly competitive market?


How can I achieve a top grade?


How can I get 8 points out of 8 in Question d of the Economics HL Paper 2?


Using the Keynesian AD/AS diagram, explain why an economy may be in equilibrium at any level of real output


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning