Definitions

Question 1

What is a need and an example

Answer 1

• Needs are basic necessities a person needs to survive.

- e.g. food, clothing, shelter

Question 2

What is a want and an example

Answer 2

• Wants are things that people want or desire which increase the quality of living.
• e.g. Examples include cars, designer clothes, etc.

Question 3

What is opportunity cost

Answer 3

• Opportunity cost is the real cost of the next best alternative that is forgone. There are unlimited wants, and limited resources. Due to scarcity, a choice must be made. Because a choice is made, there is an opportunity cost.
• Usually measured in terms of goods, services or monetary value given up (relative to the alternative course of action).