Economics Chapter 1, Sections 4-7: Goods, Wants, and Needs
Terms to Know:
Section 4: Everything Has to Be Worked For
- The first thing to understand about economics is that all good have to be worked for.
- Producers are the persons who work to provide goods. Consumers are people who use goods.
- Economics is the study of that material side of life in which everything has to be worked for and paid for.
- No goods are really free, for someone has had to work to produce them.
Section 5: Goods, Wants, and Needs
- There is not an unlimited supply of any good.
- Even in the more prosperous countries, there never are enough goods produced to satisfy everybody's wants.
- A need is a necessity - something it would be difficult to do without.
- A want is a desire, a longing, an appetite for something.
Section 6: Goods for Production, Goods to Use Up
- A capital good (investment good) is anything used in the production and distribution of goods and services.
- Consumer goods are those things produced for direct use by consumers.
Section 7: What Makes Goods Valuable?
- The value of a good is the worth that consumers attach to it.
- The value of good varies according to its utility (usefulness) and its scarcity (limited availability) at a particular time and at a particular place.
- It is scarcity and utility more than the amount of labor required to produce goods or other factors, that usually determine the value of any good.