Basic economic problem Flashcards
1
Q
Scarcity
A
While wants are infant resources are finite
2
Q
Needs
A
Basic needs for survival
3
Q
Wants
A
Goods and service that improve quality of life
4
Q
Opportunity cost
A
The cost of a decision expressed in terms of the next best alternative
5
Q
Economic goods
A
Those for which there is an opportunity cost in consumption
6
Q
Free good
A
- Those for which there is no opportunity cost in consumption
- E.g. air, wind and sunshine
7
Q
Utility
A
How much satisfaction you will get out of it
8
Q
Marginal utility
A
- The satisfaction from consuming the last one
- Initially it will be positive but then will decrease satisfaction after everyone
9
Q
Total utility
A
Total amount of utility from all of the marginal utility
