Needs & Wants Economics PDF

What are needs and wants? Needs are essential items required for survival, such as food, water, and shelter. Without them, a person cannot live. Wants are desires for non-essential items that enhance quality of life, such as luxury goods or entertainment. What are goods and services? Goods are tang...

What are needs and wants? Needs are essential items required for survival, such as food, water, and shelter. Without them, a person cannot live. Wants are desires for non-essential items that enhance quality of life, such as luxury goods or entertainment. What are goods and services? Goods are tangible items that can be seen and touched, like clothing or electronics. Services are intangible activities performed for others, such as haircuts or car repairs. Both are produced using resources, known as the four factors of production. What is the economic problem? The economic problem arises from the juxtaposition of unlimited needs and wants against the backdrop of limited resources. This disparity necessitates choices in resource allocation. What is scarcity and opportunity cost? Scarcity refers to the limited nature of resources in relation to unlimited wants. Opportunity cost is the value of the next best alternative forfeited when a choice is made, illustrating the trade-offs inherent in decision-making. What are the factors of production? The factors of production include land: natural resources, labor: the human effort used in production, capital: tools and machinery used to produce goods and services, entrepreneurship: the ability to combine resources to create goods and services. What are the four types of resources? The four types of resources are natural resources: materials from nature (e.g., minerals, water), human resources: labor force, skills, and abilities, capital resources: tools, equipment, and technology, entrepreneurial resources: skills and risk-taking ability to combine other resources. What is an economic system and what are the different types of economic systems? An economic system is a structured way of allocating resources and distributing goods and services in an economy. Types include command (planned) economies: the government makes all economic decisions, market (unplanned) economies: decisions are made by individuals based on supply and demand, mixed economies: a blend of government and free-market decision-making. What are the 4 questions all economic systems must address? Economic systems must address what to produce, how to produce, for whom to produce, when to produce. What are consumers (households) and producers (firms)? Consumers (households) are individuals or groups who purchase and use goods and services. Producers (firms) are businesses or entities that create and supply goods and services to the market. What is shortage and surplus? A shortage occurs when the demand for a product exceeds its supply, leading to unfulfilled consumer desires. A surplus happens when supply outstrips demand, resulting in excess product availability. What is specialization? How do we see this in Chisholm? Specialization refers to focusing on a particular task or production process to improve efficiency. In Chisholm, specialization can be observed in various sectors where individuals or businesses concentrate on specific goods or services, enhancing productivity and expertise in those areas.