Economics THEME 1

• Microeconomics is the study behaviour of individuals and firms in making decisions on how to allocate scarce resources
• Four factors of production: 1. Land 2. Labour 3. Capital 4. Enterprise
• opportunity cost is the benefit lost from the next best alternative forgone
• Normative statements are opinions about what ought to be.
• Positive statement are objective statements that can be tested or rejected by referring to available evidence
• value judgement is a view of the rightened or wrongness of something which is based on a personal view