Economists use the term capital to refer to physical resources. Scarcity in developed versus less developed countries. Scarcity and poverty are not the same thing. The absence of poverty is possible, the absence of scarcity is not. The Economic Way of Thinking A. Eight guideposts to economic thinking.
Scarce goods have a cost there are no free lunches.
Opportunity costs are the highest valued alternatives forgone by a particular choice. Goods produced by the public sector have an opportunity cost - education, national defense. Discuss Critical Analysis question 2. 2. Incentives matter human choice is influenced in a predictable way by changes in economic incentives. Reward structure for glass production in the former Soviet Union is an example that it applies even in socialist economies.