Scarcity and Opportunity Cost Flashcards
1
Q
What is the central purpose of economic activity?
A
To satisfy people’s needs and wants
2
Q
What is a need?
A
something people have to have; something that they cannot do without
3
Q
What is a want?
A
something people would like to have
4
Q
What is the definition of welfare?
A
human happiness
5
Q
What determines how much welfare someone gets from something?
A
The utility derived
6
Q
What is the fundamental economic problem?
A
We have unlimited wants but only finite resources to fulfil those wants
7
Q
What does the fundamental economic problem force economic agents to do?
A
To make choices in which they allocate scarce resources between competing resources
8
Q
What is an opportunity cost?
A
The benefits lost from the next best alternative from a choice
