Studied by 10 people
Economics
Study of how resources are distributed to satisfy needs of individuals, governments, and firms
Microeconomics
Category concerning the behavior of individuals and firms in distinct markets and segments.
Macroeconomics
Examines the operation of the economy as a whole
WISE ChoICES
Economic Well-being, Interdependence, Scarcity, Efficiency, Choices, Intervention, Change, Equity, and Sustainabilty
Well-Being
About prosperity and quality of life in the economy.
Interdependence
Refers to growing interaction and reliance on others in order to achieve goals
Scarcity
Resources are scarce (limited in supply) relative to infinite needs and want of individuals and society
Efficiency
How well things are done, determined by the input-output ratio
Choice
The study of choice due to finite resource and infinite wants of individuals and societies
Intervention
Roles and responsibilities of governments in terms of monitoring and regulating the behaviour of working of different markets
Change
Economic change is inevitable
Equity
Idea of perceived fairness
Sustainability
Meeting needs and wants of current generation without jeopardising future generations
Basic Economic Problem
Exists in every economy. This means as a result of scarcity choices have to be made.
Factors of Production (CELL)
4 categorised of production that are required to produce any good or service. (Land, Labour, Capital, Enterprise)
land
Refers to natural resources used in production process
Labour
Refers to human resources required in production process
Capital
Refers to non natural resources used in production process
Enterprise
Refers to skills, creativity, and risk taking ability that a business person requires to combine and manage the 3 other factors
Rewards for factors of production.
Land = Rent
Labour = Wages and salary
Capital = Intrest
Enterprise = Profit
Collectively this is known as income
Scarcity
Refers to finite resources of an economy
Needs
Goods and services essential for survival
Wants
Desire for goods that are not necessary for survival
Goods
Physical product (furniture, etc.)
Services
Intangible products (haircuts, bus trip, etc.)
Economic goods
Goods limited in supply with economic value
Renewable Recources
Factors of production that can regenerate and replenish
Opportunity Cost
Refers to cost of an economic decision, measured in terms of the best alternative choice forgone
Free Goods
Products with a natural wealth of suply and don’t need effort to get them
The basic economic question
What production should take place
How should production take place
For whom production should take place
Private sector
Sector of economy where private individuals and firms produce goods and services
Public sector
Sector where government produces or supplies goods or services
Means of answering economic question
Economic System
Free market economy
Planed economy
Mixed economy
Economic system
Way in which economy is organized and run
Free market economy
Reliers on market forces of demand and supply to allocate scarce resources
Planed economy
Government allocates scarce resources. Often associated with communist or socialist economies
Mixed economy
Mix of free and planed market economy
Production Possibility Curve model (PPC)
PPC or PPF is a diagrammatic representation of the max combination of 2 products that a country can produce
Note 
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