Definitions-eco Flashcards
Define: relative scarcity
Refers to not having enough resources to satisfy all our needs and wants. There are not enough resources relative to the level of needs and wants.
Define: resources
The raw materials used in the production of goods and services. Limited resources restrict production.
Define: market
Where buyers and sellers exchange goods or services. A market can either be physical or virtual.
Define: opportunity cost
The lost alternative use to which the economic resources could have been allocated. It is also known as the opportunity lost.
Define: consumer sovereignty
The consumer is king in deciding what economic resources are allocated in a market economy. This means entrepreneurs are working for the consumer.
Define: equilibrium price
The market price at which the supply of an item equals the amount demanded. It is where the demand and supply line intersect.
Define: target market
The market to which a business is specifically aiming its product or service.
Define: goods
Tangible items that can be handled and stored before being sold to the consumer. The item can be touched by the consumer.
Define: services
Things people do for others in return for payment. They are intangible.
Define: needs
The goods or services that are the necessities of life and include food, water, clothing, health care and shelter.
Define: wants
Goods and services that assist us to enjoy a good standard of living. And example is an iPad, as this is an item that we want rather than an item we need to survive.
Define: economics
The study of how individuals and groups make decisions on how to use our limited economic resources so as to best satisfy our needs and wants. It studies the outcomes and activities that occur as a result of a scarcity of resources.
Define: complementary product
Goods or services that go together. A complementary product when buying a roast, might be potatoes.
Define: substitute product
An alternative good or service that can be used for the same purpose. A substitute product for a potato would be a pumpkin.
