Basic Economic Terms

Vocabulary flashcards covering key concepts from Chapter 1: Basic Economic Terms, including wants, needs, goods, services, scarcity, trade-offs, opportunity cost, business, and competition.

Wants

Things that you do not have to have to survive but would like to have, such as a faster car or a better mobile phone.

Private Wants

Wants desired by individuals or small groups of people, such as a family wanting a new kitchen table.

Public Wants

Wants that are widely shared by many people, including highways, parks, and public libraries.

Needs

Things that you must have in order to survive, such as food, water, shelter, and clothing.

Goods

Physical, usually tangible products provided by businesses to satisfy wants and needs, such as groceries, phones, and cars.

Services

Tasks that businesses perform for consumers that are usually intangible, such as banking, insurance, and education.

Scarcity

The principle stating that there are limited resources for satisfying unlimited needs and wants, requiring individuals to make financial decisions.

Resources

Items that people can use to make or obtain what they need or want, such as money, fuel, and labor.

Trade-Offs

Giving up one alternative when you decide on another alternative in order to obtain something else.

Opportunity Cost

The value of the next best alternative that you were not able to choose when making a decision.

Business

Any commercial activity that seeks profit by providing goods and services to others in exchange for money.

Competition

The contest between businesses to win consumers, which serves as a direct response to wants and needs.

Indirect Competition

Competition among companies that sell different types of goods that target the same customer group and satisfy the same needs.

Economics' Starting Points

The core relationships linking resources, goods, services, wants, and necessary wants (needs).