What you'll learn
Why scarcity forces individuals and societies to make choices.
Key ideas
- Scarcity: limited resources but unlimited wants.
- Opportunity cost: the next best alternative given up.
- The factors of production: land, labour, capital and enterprise.
Exam tips
- Give a clear opportunity-cost example.
- Link scarcity to the need for choice.
Common mistakes
- Confusing the four factors of production.
- Forgetting opportunity cost is the next best alternative.