Introduction

Before going directly to Consumer Economics topic, first we need to understand the following terminologies:

“Wants and needs”

“Resource / Economic Resources”

“Concept of Scarcity”

“Trade off / Opportunity cost”

“What is Economics”?

“Economic Models”

“What is Economy?

“Wants and needs”

A need is something you have to have, something you can't do without, like food. If you don't eat, you won't survive for long.

A want is something you would like to have. It is not absolutely necessary, but it would be a good thing to have, like music.you don't need music to survive.

Some categories have both needs and wants. For instance, food could be a need or a want, depending on the type of food.

You need to eat protein, vitamins, and minerals.. These basic kinds of foods are needs.

Ice cream is a want. You don't really need to eat ice cream to survive. Still, ice cream tastes good to many people. They like to eat it. They want it, but they don't need it.

“Resource / Resources or Factors of Production”

Resource is a source or supply from which benefit is produced or transformed to produce benefit and in the process of this activity, it may be consumed or made unavailable.

Resource is defined in economics as “a service or other assets used to produce goods and services that meet human needs and wants”.

“Concept of Scarcity (کمی)”

You can’t always get what you want because resource is scarce ie less (قلیل)

Scarcity (also called paucity) is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

It states that society has insufficient productive resources to fulfill all human wants and needs.

The notion (خیال۔ وہم۔ تصور) of scarcity is that there is never enough (of something) to satisfy all conceivable human wants, even at advanced states of human technology.

Scarcity involves making a sacrifice i.e giving something up, or making a tradeoff, in order to obtain more of the scarce resource (i.e less resource) that is wanted.

Example,

Although air is more important to us than gold, it is less scarce simply because the production cost of air is zero. Gold on the other hand has a high production cost. It has to be found and processed, both of which require a great deal of resources.

“Trade off / Opportunity cost”

Give up something for something else is called TRADE OFF, while the thing that is given up is called OPPORTUNITY COST.

It means trade off is a process of selection while opportunity cost is thing that is sacrificed/not selected.

“Opportunity Cost: The Real Cost of Something Is What You Must Give Up to Get It”

Scarcity

↳ Making choices

. . . . . . . . . . ↳ Opportunity Cost

“Economic Models”

Economists use graphs or other short-cuts as tools to explain the concepts, these tools are called Economic models.

What is Economy?

The way in which goods and services are made, sold, and used in a country or area, in-other words, the economy is the production and consumption activities that determine how scarce resources are allocated in an area.