1.2 Flashcards
what does scarce resources mean?
there aren’t enough resources available to supply all these wants
unlimited wants overview
people have unlimited wants, far beyond what they actually need to maintain a meaningful existence
what is the basic economic problem?
the economic problem of scarcity. when there are finite resources available to supply infinite needs and wants
ie scarcity
what are needs?
needs are those things required that are essential to maintain sufficient survival; food, water, shelter
what are wants?
those things desired but not essential to survive; holidays, chocolate
what happens to needs and wants over time?
they change as people change. tastes and fashion are constantly shifting. as technology changes, we are able to access new products
no one lived the same way 50 years ago!!
whats the central purpose of economic activity?
the productions of goods and services to satisfy the needs and wants of society
what is a firm?
groups of individuals that work together to provide goods and services.
how should goods and services be produced?
producers should combine the factors of production in order to produce goods and services
what are the economic groups?
producers, consumers, government
what do economic groups make choices based on?
the satisfaction gained from them eg, consumers will take into account the price of the good or services
what will the economic choices impact on?
economic sustainability, social sustainability, environmental sustainability
economic sustainability
the best use of resources in order to create responsible development or growth
social sustainability
the impact of economic choices on society
environmental sustainability
the impact of economic choices on the environmnet
how can you measure the cost of making a choice?
measuring the benefit gained from it
what do resources have?
have a range of uses like a car to make- metal or tin cans
trade-offs
when a choice is made above all alternatives
opportunity cost
the value of the next best alternative that had to be given up for the alternative that was chosen. what you lose when you make a tradeoff
allocation of resources
when resources get allotted to their uses
for all decisions made by economic agents, there’s an …
opportunity cost
there are always competing…
alternatives when making trade-offs ; pepsi or fanta
