Unit 2.1 - The Allocation of resources

Resource allocation

________: the way in which economies decide what goods and services to provide, how to produce them and who to produce them for.

Macroeconomic decisions

________ are made by the government of the particular economy- a town, state or country)

Macroeconomics

________ is the study of an entire economy, as a whole.

Microeconomic decision makers

________ are producers and consumers (who directly operate in markets)

Microeconomics

________ is the study of individual markets.

Economy

an area where people and firms produce, trade and consume goods and services

This can vary in size

from your local town to your country, or the globe itself

For example

studying the effect of a price change on the demand for a good

Macroeconomic decisions are made by the government of the particular economy

a town, state or country)

Resource allocation

the way in which economies decide what goods and services to provide, how to produce them and who to produce them for

Example

a market for soft drinks