9. Noneconomic wants
Desires for something
that can be obtained without
spending money
Economic wants
Desires for items that
can only be obtained by
spending money
10. Goods: Tangible objects that can be
manufactured or produced for resale
Services: Intangible objects that
can be sold
•Consumer
•Industrial
11. Consumer goods: Products that are
useful to consumers
Consumer services:
Acts performed for
the consumer for a
fee
12. Industrial goods: Products that
are used by industries in
producing goods and services
Industrial services: Acts
performed for business for
a fee
13. Opportunity cost: The benefit that is lost
when you decide to use scarce resources
for one purpose rather than for another
Example: A consumer decides to rent an
apartment, rather than to buy a house.
The opportunity cost of this decision is the
lost benefits of home ownership.
14. Trade-off: Giving up all or part of one
thing in order to get something else
Example: Managers may be willing to
accept the production of fewer quantities
of a product in order to get workers to
produce higher quality products.
15. Economy
The system by which a nation decides how
to use its resources to produce and
distribute goods and services.
21. Scarcity
A condition that exists when there
are not enough goods or services
available to meet the wants and
needs of consumers
22. Basic economic questions
•What goods and services should be
produced?
•How should the goods and services
be produced?
•For whom should the goods and
services be produced?
