Economic

Strand 1: Introduction to Economics

Scarcity

a situation where resources are not enough to produce all the goods and services required to satisfy all the needs and unlimited wants

Choice

the option selected from various alternatives

Opportunity cost

is the next best alternative foregone while making a choice

Law of increasing cost

as production of a good increases, the opportunity cost of producing additional units rises, leading to higher costs.

Law of Constant cost

as production of one good increases, the opportunity cost of additional units produced remains constant

Production Efficiency

Producing maximum with the given level of resources. Scarce resources are rationed to their highest use and there is no wastage

Allocative Efficiency

the economy is producing the unique combination of goods that best meets the needs of society at a given point in time.