AP Dojo | Free Economics Study Resources

Scarcity means limited resources force choices; every choice has an opportunity cost.

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Scarcity

The fundamental problem of economics is that:

Governments do not collect enough in taxes to cover spending.

Resources are limited, but human wants and needs are unlimited.

Companies must specialize in producing specific goods rather than diversifying.

An individual's income is insufficient to purchase everything they desire.

Apply what you've learned with these practice questions. These questions test your understanding of the key concepts.

The fundamental problem of economics that arises from limited resources and unlimited wants is known as:

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Scarcity means unlimited wants exceed limited resources; it forces trade-offs.
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Opportunity cost is the value of the next-best alternative given up when making a choice.
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Economics studies how people and societies allocate scarce resources to satisfy wants.