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?
Wants are 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 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 scarce resources that have alternative uses so as to maximise satisfaction of consumers needs and wants.
What is needed for economics?
You need 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?
Our needs are food, water, shelter and clothing.
What are our limited means?
Our means are time, skill, money and family.
What are the differences between needs and wants?
Needs are required to sustain life, wants are not.
Wants are unlimited needs are not.
Means.
Our limited resources we have to satisfy our needs + wants
- money
- time
- skill
- family
