General Terms and Definitions Flashcards
Define Needs
Things individuals must have satisfied in order to sustain life.
What happens if needs are not meet?
You may die.
What are wants?
Desired individuals would like to have satisfied but are not necessary to sustain life. Wants are unlimited.
What is scarcity?
Limited resources relate to our unlimited 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 solving the problem of how to allocate SCARCE RESOURCES that have alternative uses so as to maximise SATISFACTION of consumers NEEDS and WANTS.
What is needed for Economics?
Scarcity/limited resources and unlimited wants.
What are the economic Decisions.
WHAT to produce
WHAT resources
HOW they are produced
WHO is to get the goods
What are our needs?
Food, water, shelter, clothing
What are our limited Means?
Time, skill, money, family,
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
