1.2 Flashcards
(28 cards)
Define Need
MUST have
Define Want
would like to have
Limited means
time, knowledge, income, money and family
The basis of economics
How people satisfy their unlimited want s using scarce resources
Scarcity
limited means in relation to unlimited wants
Opportunity cost
the next best alternative forgone
Producers
use resources to create other goods
consumers
consume goods and services
Goods
tangible
service
something someone does for someone else
free goods
plentiful- no cost
Economic goods
scarce therefore cost
capital goods
used in the production of other goods
consumer choices- influences
by price, quality, features, Limited means, tastes + preference and values
Values are…
Key principles/ core beliefs
Factors that influence values…
age, gender, culture, upbringing
Fair trading
doing what is right when dealing with others
Demand
Quantiny of a good or service an individual is willing and able to buy at various prices
Ceteris parabus
all other factors held unchanged
Law of demand
price increases Quantity demanded decreases ceteris parabus
Cause of a shift along the demand curve
change in price
cause of demand curve shift
advertising, income, direct tax, tastes and fashions, price of a substitute, price of a compliment
Relax ceteris parabus
whole demand curve shifts - change in demand
Inferior goods and services
low quality goods and services- individuals buy less as income decreases
