Microeconomics starter

need

A good an individual needs to survive

want

A good or service a you desire but isn’t essential

Basic economic problem

People have unlimited wants and needs but we have scarce resources

Land

natural physical resourcesL

Labour

Human effort into making a good or service

Capital

Man-made resources or finances

Enterprise

The ability to risk take, innovate, and organize production

Rent

reward for land

profit

reward for enterprise

interest

reward for capital

wages

reward for labour

opportunity cost

The cost of the next best alternative given up when making a decision.

Consumer rationale

maximise total utility

workers rationale

wages and benefits from work

producers

profit

government

social welfare

positive statement

a statement that can be tested and validated through evidence, describing objective conditions in the economy.

normative statement

a statement that reflects opinions or subjective judgments about what ought to be, rather than what is.