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?
Desires 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 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 and unlimited/wants
What are the economic decisions?
- what to produce?
- what resources are to be used?
- how they are to be produced?
- who is to get the goods?
What are needs?
our needs are
- food
- water
- shelter
- clothing
What are our limited means?
Our limited resources we have to satisfy
- 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.
Define final goods
consumer goods available for consumption for needs + wants
Define durable consumer goods
consumer goods that last along time eg car house
define non-conumer goods
consumer goods that are used up immediately eg food, drinks and cigarettes
