Basic Economics Concepts

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Economics

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Involves making choices about how you satisfy your needs and wants.

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The economic problem

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The situation where we have limited resources but unlimited wants.

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Opportunity Cost

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The thing you give up when you choose something else.

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Goods

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Things that you buy that you can see and touch.

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Services

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Where people do things for you, or let you use something.

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Needs

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Things that are necessary for survival.

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Wants

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Things we would like to have, but that are not necessary.

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Scarcity

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Refers to the basic fact of life that there is a limited amount of resources that can be used to satisfy our needs and wants.

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Natural resources

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The things from the land that are used to produce goods and services (e.g., water, minerals, sun’s energy).

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Capital resources

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The tools, equipment, buildings and other items that are used to produce goods and services.