General Terms & Conditions Flashcards
Define Economics
The study of solving the problem of how to allocate SCARCE RESOURCES that have alternative uses so as to maximis SATISFACTION of consumers NEEDS and WANTS
What conditions are needed for Economics?
Scarcity / limited resources and unlimited wants
What Economics decisions are needed?
What to produce
What resources are to be used
How they are produced
Who is to get the goods
What are Needs?
Things individuals must have satisfied in order to sustain life
What happens when needs are not met?
Long term you will 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 means?
The condition of limited resources relative to wants
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.)
What are our Needs?
Food
Water
Shelter
Clothing
What are Luxury Goods?
Are goods we want to have to make life better, but NOT essential to our needs
What are our Limited Means?
Time
Money
Skill - Education
Family
What are Basic Goods?
Are goods that are essential for our needs
What is Choice?
A choice is a decision between various alternatives when you have limited means
What are the two differences between Needs and Wants
Needs are required to sustain life, and are limited whereas, wants are desires an individual would prefer to have satisfied, and are unlimited
