General Terms and Defenitions Flashcards
Define Needs
Things individuals must have satisfied in order to sustain life.
What happens if needs are not met?
You may die.
What are Wants?
Desires individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited.
What is Scarcity?
There are 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. (the second ranked alternative given up when a choice is made)
Define Economics
The study of the problem of how to allocate scarce resources that have alternative uses so as to maximise satisfaction of consumers needs and wants.
What is required for economics?
There must be scarcity/limited resources and unlimited wants
What are the Economic Decisions?
What to produce? What resources are to be use and how they are produced? Who is to get the goods?
What our our needs?
Food, Water, Shelter and Clothing.
What are the two differences between needs & wants?
- Needs are required to sustain life & wants are not.
- Wants are unlimited. Needs are not.
Means
Our limited resources we have to satisfy our needs & wants (money, time, skill & family)
