Choice | Consumer | Economic Goods | Free Goods | Goods | Limited Means | Opportunity Cost | Scarcity | Service | The basic economic problem | The real cost of a decision | Wants | Why can individuals not have everything they want
Man-made goods use in the production of other goods and services are termed:
Capital goods. Capital (producer) goods are man-made goods used in the production of other goods and services, for example, tools, machinery.
Fahad's parents are concerned about the amount of time he spends on his playstation instead of doing his homework. Fahad argues that he can do both properly. Explain why an economist might disagree with Fahad.
Time is scarce so more time spent on one means less time on the other / time spent on his playstation interferes with time spent on his homework.
Explain how scarcity occurs.
Because of limited resources (means and time) in relation to unlimited wants.
_________ are what individuals must have (are necessary) to survive.
Needs. Needs are things individuals must have in order to sustain life, such as food, clothes or shelter (warmth) and water.
What is the economic term that describes things individuals must have in order to sustain life, e.g., food, clothes or shelter and water.
Who has unlimited means?
Nobody. All the world's population faces the problem of limited (finite or scarce) means, that of time, income and skill. Time is limited whether you are poor or wealthy. There are only 24 hours in a day and time spent on one activity can-not be spent on another activity. Income (money) is a limited means for all people because money spent on one item cannot be used to buy something else at the same time. There is a finite amount of money that people have or earn, meaning that even the rich cannot have everything they want. Everyone has skills but no one person is good at everything, so the skills that an individual possesses are limited. Therefore, no one has unlimited means (everyone has limited means).
Explain the concept of choice.
A choice is a decision between alternatives, e.g., to go out for a meal or see a movie at a cinema or rent a video. Individuals have limited means (income, skill, time), so can not afford to buy everything they want or have sufficient time to do everything, so they must make choices.