General Terms and Definitions Flashcards
Define Needs
Things individuals must have satisfied in order to 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?
Scarcity is limited resources relative to our 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 the choice is made)
Define Economics
The study of Economics is of how individuals and groups make decisions on limited resources to best satisfy their wants and needs.
What is needed for Economics?
For economics to happen there must be scarcity/ limited resources and unlimited wants.
What is an economic decision?
- What to produce.
- What resources are to be used.
- How they are produced.
- Who is to get the goods.
What are our Needs?
Food, Water, Shelter, Clothing otherwise it may lead to death.
What are our limited means?
- Time
- Skill
- Money
- Family
What are the two differences between needs and wants?
- Needs are required to sustain life, wants are not.
2. Wants are unlimited.
What are means?
Our limited resources we have to satisfy our needs and wants.
