General Terms and Defenitions Flashcards
Define Ecomonics
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 conditions are needed for economics?
Scarcity/limited resources and unlimited wants
What economic decisions are needed?
What to produce
What resources are to be used
How they are produced
Who gets the goods.
What are needs?
Things individuals must have satisfied in order to sustain life.
What happens if needs are not met?
Long Term- DEATH!
What are wants?
Desires of individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited.
What is limited means (scarcity)?
The condition of limited resources relative to wants.
What is choice?
A decision made between alternatives.
What is opportunity cost?
The next best alternative FOREGONE when a decision is made.
What are our needs?
Food, water, shelter, clothing.
What are luxury goods?
Gods that make life better but are not necessary to sustain life.
What are basic goods?
Just the essential goods for our needs.
What are our limited means?
Time, money, skill and family.
What are the two differences between needs and wants?
Needs are needed to sustain life, wants are not. Needs are limited, wants are unlimited.
