general terms and definitions Flashcards
define needs
things individuals must have satisfied in order to sustain life
what happens if needs are not meet
you may die
what are “wants”
desires individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited.
what is scarcity
scarcity is limited resources relative to unlimited wants
what is choice
choice is a decision made between alternatives
what is opportunity cost
it is the next best alternative foregone when a decision is made (the second ranked alternative given up when a choice is made)
what is economics
the study of solving the problem of how to allocate scarce resources that have alternate uses so as to maximise satisfaction of consumers needs and wants
what is needed for economics
for the study of economics you need scarcity/limited resources and unlimited wants
what are economics decisions
- what to produce
- what resources will be used
- how they are to be produced
- who is to get the goods
what are our needs
food, water, shelter, clothing
what are our limited means
- time
- skill
- money
- famliy
what are the differences between needs and wants
*needs are required to sustain life
want are not
*wants are unlimited
what is the definition of means
our limited resources we have to satisfy our needs and wants
