ECO - 1.1 Basic

• Economics


  The study of how people make decisions/ choices regarding their scarce resources to satisfy their unlimited wants
• Microeconomics


  • Studies economic behaviour of an individual or firm
• Macroeconomics


  • Studies the entire economy
• Positive Economics


  Statement of fact - Facts and events observed factually. Accuracy can be verified.
• Normative Economics


  Expresses value judgements. Accuracy cannot be proven. Questions whether it is good or bad, fair or not fair.
• Wants


  Human's desires for goods & services which gives them pleasure & satisfaction. They are goods & services we can do without (not necessary to preserve life), but desire to improve our quality of life (non-essential).
• Needs


  Human requirements for life and survival. Essential.
• Wants are unlimited but resources are limited in supply/scarce
• Scarcity


  The central concept in economics, referring to the limited availability of economic resources relative to society's unlimited demand for goods and services
• Scarcity is an inevitable problem that arises due to unlimited wants and limited resources
• Scarcity affects all - consumers, producers, governments, workers
• Economic goods


  Goods or services that are scarce (limited in supply) relative to society's wants - require scarce resources to produce, which could be used to produce something else
• Free goods


  Goods which occur naturally, and are unlimited/abundant in supply i.e. not scarce relative to society's wants - require no resources to produce it
• Types of goods


  • Free goods
  • Economic goods
• Economic goods


  • Consumer goods
  • Capital goods
• Consumer goods


  Goods and services for consumption purposes, to satisfy human needs or wants directly/immediately
• Capital goods


  Human-made resources used in the production of other goods and services, for production purposes