general terms and definitions Flashcards
define needs?
things individuals must have satisfied in order to sustain life.
what happens if need 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 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 scarce resources that have alternate uses 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 will be used
how they are produced
who is to get the goods
what are our needs?
food, water, clothing, shelter
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
wants are unlimited - needs are not
what are means?
our limited resources we have to satisfy our needs and wants
