Download 1. Consumer choice notes

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.