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.
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