General tearms and definitions. Flashcards
Define Needs
Things individuals must have satisfied in order to sustain life.
What happens if needs are not met?
You may die
What are wants?
Wants are desires individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited.
What is scarcity?
Limited resources relative to unlimited wants.
What is Choice?
A decision made between alternatives.
What Is opportunity Cost?
The next best alternative FOREGONE when a decision is made. (The second ranked alternative given up when a choice is made).
Define Economics
The study of solving the problem of how to allocate scarce resources that have alternative uses so as to maximise satisfaction for consumers needs and wants.
What is needed for Economics?
For Economics to happen there must be unlimited and limited wants.
What are the economic decisions?
The first economic decision is what to produce
With your limited resources?
-What resources are to be used?
-Who is to get the goods?
What are our needs?
Our needs are food, water, shelter and clothing.
What are our limited means?
Our limited resources we have to satisfy our needs and wants.
- Time
- Skill
- Money
- Family
whats are the two differences between needs and wants?
needs are required to sustain life wants are not.
wants are unlimated.
