General Terms and Definitions Flashcards
Define economics
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.
What conditions are needed for economics
Foe economics to happen there must be scarcity/ limited resources and unlimited wants
What economic decisions are needed
What to produce
What resources are to be used
How they are to be produced
Who is to get the goods
What is needs
Things individuals must have in order to sustain life
What happens if needs are not met
If your needs are not met, longterm - you will die
What are wants
Desire that individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited
What is limited means/ scacristy
The condition of limited resources relative to wants
What is choice
A decision made between alternatives
What is opportunity cost
The next best alternative FOR GONE when a design is made (the second ranked alternative given up when the choice is made)
What are our needs
Food water shelter and clothing
What are luxury goods
Are goods we want to have to make life better but are not essential for our needs
What are basic goods
They are goods that are essential for our needs
What are our limited means
- time
- money
- skill
- family
What are the two differences between wants and needs?
- Needs are needed to sustain life, but wants are not
- Needs are limited but wants aren’t