General Terms and Definitions Flashcards
Define Needs.
Thing individuals must have satisfied in order to sustain life.
What happens if needs are not met?
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?
Limited resources relative to unlimited wants.
What is choice?
A decision made between alternatives.
What is opportunity cost?
The next best alternative FORGONE 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 the consumer needs and wants.
What is needed for economics?
For economics to happen there must be scarcity/limited resources and unlimited wants.
What are the economic decisions?
What to produce.
What resources are to be used and how they are produced.
Who is to get the goods.
What are our needs?
Food, water, shelter and clothing.
What are our limited means?
Time, Skill, Money and Family.
What are two differences between needs and wants?
Needs are required to sustain life-wants are not.
Wants are unlimited-needs aren’t.
Define Means
Our limited resources we have to satisfy our needs and wants
