The central problem of economics is to satisfy the peoples and nations wants.
The problem we are faced with is that our resources, here identified as money, are __1__. The only way we can resolve our problem is to make choices. After looking at our resources, we must examine our list of __2__ and identify the things we need immediately, those we can postpone, and __3__ we cannot afford. As individuals, we face the central problem involved in economics-deciding just how to allocate our limited our limited resources to provide __4__ with the greatest satisfaction of our wants.
Nations face the same problem. As a countrys population ___5__, the need for more goods and services grows correspondingly. Resources necessary to production may increase, but there __6__ are enough resources to satisfy the total desires of a nation. Whether the budget meeting is taking place in the family living room, in the conference room of the corporation __7__ of directors, or in the chamber of the House of Representatives in Washington, the basic problem still exists. We need to find __8__ of allocating limited resources in order to satisfy unlimited wants.
A short time ago economists divided goods into two categories, free and economic. The former, like air and water, were in __9__ abundance that economists had no concern for them. After all, economics is the __10__ of scarcity and what to do about it. Today many of these free goods are __11__ very expensive to use. Pollution has made clean air and water expensive for producers extra costs, and __12__ taxpayers who pay for the governments involvement in cleaning the environment.
In the 1990s, almost all goods are __13__. Only by effort and money __14__ obtained in the form people wish.
Meeting needs of people and the demands from resource available __15__ the basic activity of production. In trying to meet unlimited wants from limited economic goods, production leads to new problems in economics.
EXERCISE:
1. A limited B unlimited C scarcity D abundant
2. A want B problem C wants D resources
3. A those B some C others D many
4. A them B themselves C ourselves D ours
5. A expand B extends C grows D increase
6. A always B sometimes C often D never
7. A management B function C board D group
8. A people B economists C way D methods
9. A so B great C such D such an
10. A form B study C means D source
11. A practically B in practice C in reality D practicably
12. A the B / C for D with
13. A plentiful B scarce C abundant D in full supply
14. A they can be B can they be C they must be D must they be
15. A are led to B leads C lead to D leads to
KEY:
A C A C C D C D C B C C B B D
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