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?
Desired individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited.
What is scarcity?
There are limited resources relative to our unlimited wants.
What is choice
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)
Define Economics
The study of solving the problem of how to allocate SCARSE RESOURCES that have alternative uses so as to maximise SATISFACTION of consumers NEEDS and WANTS.
What is needed for Economics?
Scarcity/limited resources and unlimited wants.
What are the Economic Decisions.
WHAT to produce.
WHAT resources are to be used and 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. Family
What are the two differences between Needs and Want?
Need are required to sustain life- wants are not
Wants are unlimited- needs are not
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