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
Caleb likes to spend his weekends either deep-sea fishing, tramping or orienteering. Explain how time is a limited resource for Caleb. In your answer you should refer to the resource material and explain scarcity and opportunity cost.
Scarcity is the term given to the idea that consumers have limited means relative to unlimited means. Time is a limited resource for Caleb, there are only 24 hours in a day and he does not have enough time to do all three activities in the same weekend. Caleb must therefore decide what activity (deep-sea fishing, tramping or orienteering) that he wants to do the most and choose this activity. If he ranks deep-sea fishing the most desired option ahead of tramping, then tramping would be his opportunity cost as it is the next best foregone from the decision he makes.
Jamie has worked a part-time job after school and earnt $2 000 which she will use to either put into a savings account, or spend it on a month long trip to Australia. Jamie decides to put the $2 000 into a savings account. Explain the economic problem faced by Jamie and the opportunity cost of her decision.
The economic problem faced by Jamie is scarcity.Individuals have limited means (income, skill, time) relative to their unlimited wants, so can not afford to buy everything they desire or have sufficient time to do everything, so they must make choices. Jamie has only $2 000 to decide between the two options, either save or a trip to Australia. She cannot afford to do both options, so therefore must make a choice. Choosing the savings option means foregoing the next best alternative, which is the opportunity cost of her decision. In Jamies' case the opportunity cost is the month long trip to Australia foregone.
What is the economic term that describes things individuals must have in order to sustain life, e.g., food, clothes or shelter and water.
What is the relationship between limited means and the need to make decisions?
Idea that individuals can't have everything they want so must make choices.
Explain what is meant by fair trading. Include an example in your answer.
Doing what is right and just when dealing with others/not cheating or deceiving others/plus clear example.
Describe what is meant by the term 'consumer'.
A consumer is a person/individual who buys/uses goods and/or services.
Connor has a part-time job working at the video store. This often means that he can't go out with his friends because he is working. If Connor takes a night off and goes with his friends to a party, what is the opportunity cost of his decision?
Earning an income from working/working.