General Terms and Definitions Flashcards

1
Q

Define economics

A

Economics is the study of solving the problem of how to allocate SCARCE RESOURCES that have alternate uses so as to maximise SATISFACTION of consumers NEEDS and WANTS.

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2
Q

What conditions are needed for economics

A

Foe economics to happen there must be scarcity/ limited resources and unlimited wants

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3
Q

What economic decisions are needed

A

What to produce
What resources are to be used
How they are to be produced
Who is to get the goods

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4
Q

What is needs

A

Things individuals must have in order to sustain life

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5
Q

What happens if needs are not met

A

If your needs are not met, longterm - you will die

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6
Q

What are wants

A

Desire that individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited

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7
Q

What is limited means/ scacristy

A

The condition of limited resources relative to wants

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8
Q

What is choice

A

A decision made between alternatives

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9
Q

What is opportunity cost

A

The next best alternative FOR GONE when a design is made (the second ranked alternative given up when the choice is made)

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10
Q

What are our needs

A

Food water shelter and clothing

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11
Q

What are luxury goods

A

Are goods we want to have to make life better but are not essential for our needs

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12
Q

What are basic goods

A

They are goods that are essential for our needs

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13
Q

What are our limited means

A
  • time
  • money
  • skill
  • family
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14
Q

What are the two differences between wants and needs?

A
  • Needs are needed to sustain life, but wants are not

- Needs are limited but wants aren’t

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