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What is economics
Economics is a social science - meaning that it is a study of interaction/behaviour/people
because it is dealing with human behaviours, it is not possible to make scientific experiments
Who are the 3 economic agents
Individuals/households
Business/firms
Governments
Ceteris paribus/rationality
All other influencing factors are held constant
Positive statement
Can be tested/proved with numerical statistics
Normative statement
value judgement/subjective/opinion
Cannot be tested
Ought, should, fair, unfair
What is the economic problem
Scarcity
reason: infinite wants, finite resources
Because of scarcity, economists have to decide on 3 things. What are they?
What to produce
How to produce
Who to produce
Opportunity cost
Cost of the next best alternative forgone
What are the 4 factors of production
1) Capital
2) Labour
3) Land
4) Enterprise
What is a production possibility frontiers
Combinations of goods an economy can produce with its given level of resources in a given period of time when all factors of production are fully & efficiently employed
What is productive efficiency
utilizing resources as efficiently as possible to maximize output
Pareto Efficiency
Cannot make something better off without making the other thing worse off
What is the distinction between capital & consumer goods
Capital goods are goods used in production of other goods (ie. Machines)
Consumer goods are produced to be used/consumed/provides utility directly to consumer (ie. TV)
Distinction between renewable & non-renewable resources
Renewable - infinite, replaceable if rate of extraction is smaller than the rate of renewable
Non-renewable - finite (oil, coal, natural gas)
Difference between goods & services
Goods - tangible
Services - not tangible (ie. Education, healthcare)
Note 
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