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economics unit 1 part 1

what are samuelsons 3 basic economic question

1) what shall we make with the limited resources

2) how shall we make them

3) who gets the resources

whats a need?

a necessity (good or service) that a consumer must have to survive. that is a participative requirement for society. this would change in different countries

whats a want

a good or service that is derived for the function it provides but is not necessary for the function of society

whats the economic problem

our infinite wants in society cannot all be satisfied with the limited resources at our disposal. all resources are scarce

what is scarcity

not enough resources to satisfy our wants

whats the economic choice

where we decide how to use and allocate scarce resources

what are limited resources

all resources are finite.

what are infinite wants

there is no country where every persons wants can be met

whats resource allocation

making a decision as to how resources are used. it requires the economic choice

what are goods

tangible items

what are services

intangible items

whats opportunity costs

the benefit foregone from the best alternative when a choice is made

whats a positive statement

can be tested

whats a normative statement

a value judgement