VII. Fill in the gaps with the suitable words

efficiency; insufficient; alternative; curve; sacrifice; limited resources; trade-offs; scarce resources; benefits; outputs; production possibility frontier; economic tools; issues; to utilize; determine; available; efficient; scarcity; allocates; resolve

Because resources are 1)______ to produce all the things we want, we have to choose how best to use those resources. In deciding how to use our 2)______ certain 3)______ are necessary.

The value of what we 4)______ when resources are used to produce one thing rather than another is the opportunity cost of what is produced. In order to get the greatest 5)______ from our 6)______, we should use them for the 7)______ that best serve our needs. If we don’t, then the opportunity costs of what we produce will be too high.

A 8)______ shows a trade-off between two alternative uses of a resource. The PPF shows the opportunity cost of producing more of one good by showing the amount of the 9)______ good that is sacrificed. Production possibility frontiers generally 10)______ outward because of increasing opportunity costs incurred as more of one good is produced. Production possibility frontiers are 11)______ helpful in analyzing the opportunity costs of trade-offs.

All economic systems must 12)______ three basic economic 13)______: what to produce, how to produce; for whom to produce. 14)______ cannot be efficiently dealt with unless the economy 15)______ its resources to producing the goods and services most needed and desired. An economic system needs also 16)______ the most 17)______ production methods with the resources 18)______. Finally, an economic system must 19)______ who gets how much of what is produced.

There are four principally economic goals by which the effectiveness of an economy can be judged: 20)______, price stability, full employment and growth.