Nature of Economics - 3. Future implications of choices

Opportunity Cost

The trade-off for choosing one option over another, representing the benefits lost from the next best alternative.

Consumer Goods

Products produced to satisfy individual and community needs and wants immediately.

Capital Goods

Goods produced to be used in the production of other goods and services, aimed at fulfilling future needs.

Economic Efficiency

Achieving maximum returns from limited resources.

Factors Affecting Individual Choices

Income (Y), Consumption (C), and Savings (S), all of which influence spending and saving decisions.

Business Decision Factors

Elements such as optimal pricing, cost minimization, capital and labor use, and compliance with laws and regulations.

Government Budget Priorities

Decisions on allocating spending between immediate needs like welfare and future investments in infrastructure and education.

Impact of Education on Income

Forgoing income now to pursue education, which may lead to a higher income in the future.

Influence of Work Type

The type of employment affects the level of income (Y), which in turn impacts consumption (C) and savings (S).

Progressive Tax System

A taxation structure where the tax rate increases as the taxable amount increases, affecting individuals' disposable income.