The basic Economic Problem: chapters 1,2,3 and 4 Flashcards
Wants:
Wants are goods and services that are unlimited and aren’t necessary for our survival for example; a tv or a computer.
Needs:
Our needs are essential goods and services required for our survival and are scarce.
Consumer durables:
Goods that do not need to be purchased very often.
Free goods:
A good that is not scarce, and therefore is available without limit.
Examples: Ocean and the sun.
Public goods:
Goods that are available to all members of society.
Example: Public education or national defence.
Merit goods:
Are goods provided free or cheaply because the government wishes to encourage their consumption
Economic goods:
Are items that satisfy human wants, provides utility and are scarce.
Geographical mobility:
Willingness and ability of a person to relocate from one area to another for employment purposes.
Occupational mobility:
The ability of workers to switch careers fields in order to meet the needs of the industry.
Services:
Services are non-physical items that can be provided by firms and governments.
Opportunity Cost:
It’s is the opportunity between choosing the second best option and the best option while considering the second best.
PPC:
It stands for (PRODUCTION POSSIBILITY CURVE).
What is meant by the basic economic problem?
How to best allocate scarce resources in order to satisfy people’s unlimited needs and wants.
What is economics the study of?
Economics is the study of how resources are allocated to satisfy the unlimited needs and wants of individuals, governments and firms in an economy.
What are the three economic questions?
What to produce (Individuals or households)
For whom to produce it (The government)
How to produce it (Firms which operates in the private sector of the economy).
