Resource Allocation
Definition
Resource allocation refers to the process of distributing scarce resources among competing uses or individuals in an economy.
Analogy
Imagine you have a limited amount of money and you need to decide how to spend it wisely. You have to allocate your resources between buying groceries, paying bills, and saving for a vacation. Similarly, resource allocation in an economy involves making choices on how to distribute limited resources like land, labor, and capital.
Related terms
Opportunity Cost: The value of the next best alternative that is given up when making a choice.
Production Possibilities Frontier (PPF): A graph that shows the maximum combination of goods an economy can produce with its available resources.
Factors of Production: The inputs used in the production process, including land, labor, capital, and entrepreneurship.
"Resource Allocation" appears in:
Subjects (1)
Additional resources (1)
Are you a college student?
Study guides for the entire semester
200k practice questions
Glossary of 50k key terms - memorize important vocab
Resources
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.