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Scarcity, allocation, and why misallocation matters

Scarcity, allocation, and why misallocation matters

Flowchart from scarce resources through the market system to either efficient allocation and higher welfare or market failure, misallocation, social costs and government intervention

Economics starts with scarcity: land, labour, capital and enterprise are limited, but human wants are unlimited. Because resources are scarce, every economy must decide what to produce, how to produce it, and who gets it.

Misallocation of resources Lesson

  1. GCSE
  2. /Economics
  3. /Misallocation of resources