Consumer choice Limited Means We all have limited means (personal resources) Our means are time, skill, money, and family (whanau) Wants Wants are unlimited Wants include our needs Needs are things we must have to survive e.g. rice A want may be for a better quality need e.g. not just rice to eat but a fancy meal Wants are things you would like to have Scarcity In economics scarcity means that more of an item is wanted than is available. Cars are Scarce. Because our wants are greater than our means scarcity exists. Logical people will use their means to satisfy their needs before their wants. Choice Decisions have to be made if wants are greater than our means. Opportunity cost The consequence of a decision is the opportunity cost. When we choose one thing we miss out on the next best option Opportunity cost is the next best alternative given up when making a decision.