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 maximise satisfaction of consumers needs and wants.
What conditions are needed for economics.
scarcity/limited resources and unlimited wants.
What economic decisions are needed:
What to produce.
What resources are to be used.
How resources are produced.
Who is going 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 limited means (scarcity).
The condition of 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.
What are our needs.
Food, water, shelter, clothing.
What are luxury goods.
Luxury goods are goods we want to have to make life better but not essential to our needs.
What are basic goods.
Basic goods are essentials for our needs.
What are our limited means.
Time, Money, Skill & Family
What are the two differences between wants & needs.
Needs are needed to sustain life wants are not & needs are limited wants are unlimited.
