General Terms and Defenitions 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 that individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited.
What is Scarcity ?
For Scarcity to exist there are limited source relative to unlimited wants.
What is Choice ?
Choice is a decision made between alternatives.
What is Opportunity Cost ?
Opportunity Cost is 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 of consumers needs and wants.
What is needed for economics ?
You need scarcity / limited resources and unlimited wants.
What are the economic decisions ?
What to Produce ?
What resources are to be used ?
How are they produced ?
Who is to get the goods ?
What are our Needs ?
Our needs are food, water, shelter & clothing.
What are our limited means ?
Our means are time, skill, money, family.
What are the differences between needs and wants ?
- Needs are required to sustain life, Wants are not
- Wants are unlimited, needs are not
Means
Our limited resources we have to satisfy our needs and wants - money
- time
- skill
- family
