The word economy describes the management of theresourcesof a country.
Economy is a system in which producers produce the goods and services consumers demand.
Economics is a social science that studies how people make use of scarce resources.
There are two branches of economics; microeconomics and macroeconomics.
Macroeconomics is concerned with issues of objectives and policies having to do with the overall/general economy, such as inflation, unemployment, growth and development and national income.
Microeconomics studies individual units within an economy and how these units interrelate.
Scarcity is the central problem of economics.
Individuals have unlimited wants and needs, however the resources available to satisfy these wants and needs are limited.
There are not enough resources available to produce all the goods needed to satisfy all our wants and needs.
Scarcity forces individuals to make choices as every want and need cannot be satisfied so individuals must choose among alternatives.
Scarcity is a condition in which individuals are forced to make choices among available alternatives because resources are limited compared to man’s unlimited wants and needs.
In a scarce economy, individuals choose what to consume and society chooses what to produce.
Society decides who gets what by producers attaching prices to goods and services, so who values it the most pays the most for it.
Economic resources are those goods or services available to individuals and businesses for the production of consumer products.
Opportunity cost is the opportunity lost; that is what we lose out on when we decide not to use a particular resource for a particular use.
Opportunity cost is what could have been done with the resources when decisions are made about their use.
The government of a country may face the alternative of applying its resources to the development of a stadium or devoting the same resources to the development of a hospital; if the stadium is selected, the opportunity cost is the hospital.
A householder wants to buy a microwave oven and a toaster oven but has limited money; if he chooses to buy the microwave, the opportunity cost is the toaster oven.
Research the production possibility frontier.
Resources are scarce, so choices must be made as to how these resources are allocated because of society's competing needs and wants.
Production, exchange/distribution, and consumption are the three main activities that must occur in order to satisfy man's unlimited wants with scarce resources.
If Travis has $2000 and chooses to go to the movies ($1200) over going to a party ($2000), the next best alternative (opportunity cost) is the party since he chose to go to the movies.
A firm has $20,000 and can purchase a new desk or paint for one of the office; it chose to purchase paint, so the opportunity cost is the new desk.
Opportunity cost is defined as the value of the next best alternative foregone or sacrificed.
Economic resources refer to factors of production (land, labour, capital and enterprise) which are limited in supply compared to man’s unlimited wants.