General Terms and Definitions Flashcards
Define Needs
Things 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 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?
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?
- How they are 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 differences between needs and wants?
Needs are required to sustain life - wants are not. Wants are also unlimited.
Means
Our Limited resources we have to satisfy our needs + wants -money, time, skill, family
