Wants
Things we desire but are not essential to survival.
The economic problem
Key definitions
The basic economic problem
We have infinite wants but finite resources.
Renewable resource
A resource which can be regenerated and used again.
Non-renewable resource
A resource which cannot be regenerated or used again.
Opportunity cost
The next best alternative forgone.
Scarcity
Limited availability of resources.
Samuelson's 3 questions
What to produce? How? For whom?
Wood
Example of a renewable resource — trees can be regrown.
Fossil fuels
Example of non-renewable resources.
Energy mix
UK shifting towards renewables affects long-run resource use.
Key concepts
Resources are scarce while wants are infinite, creating the basic economic problem.
Economics helps allocate scarce resources by answering Samuelson's three key questions.
Renewable energy investment trades off short-run cost against long-run sustainability.
Relevant tips
- Link renewable vs non-renewable resources to UK energy policy examples.