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Understand the fundamental economic problem of limited resources versus unlimited wants.
Define scarcity and the necessity of choices made by individuals, firms, and governments.
Explain opportunity cost and its implications.
Address the basic economic questions: what, how, and for whom production occurs.
Define the term ‘ceteris paribus’ (holding other factors constant).
Explain decision-making at the margin.
Recognize the significance of time in economic considerations.
Differentiate between positive and normative statements.
Identify factors of production: land, labor, capital, and enterprise.
Discuss the division of labor.
Examine how resources are allocated in market, planned, and mixed economies.
Discuss the transition problems when shifting from central planning.
Analyze the characteristics of the production possibility curve and apply opportunity cost.
Understand functions and types of money.
Classify goods into free goods, private goods, public goods, merit goods, and demerit goods.
Identify issues associated with information failure.

Definition: The fundamental economic problem is the discrepancy between scarce resources and unlimited wants.
Scarcity and Choice: This concept highlights that resources are limited; consequently, choices must be made regarding their use.
Key Terms:
- Scarcity: Resources are insufficient to fulfill all wants.
- Choice: The selection of one option over others due to limited resources.

Land: Natural resources available for production (e.g., earth, forests, minerals).
- Reward: income generated from land ownership.
Labor: Human effort available for work (considering age and willingness to work).
- Reward: wages or salaries paid to workers.
Capital: Man-made tools and facilities aiding production (e.g., machinery, buildings).
- Reward: rate of return generated from capital use.
Enterprise: Organizes the other factors of production and assumes risk.
- Reward: profits earned from entrepreneurial ventures.

Economists evaluate numerous issues stemming from scarcity, such as unemployment, inflation, and environmental crisis.
Key Terms:
- Resources: Inputs used to produce goods/services.
- Wants: Unlimited needs and desires not easily realized.

Distinction Between Needs and Wants: Needs are essential for survival while wants enhance quality of life and vary among individuals.
Scales of Preference: Personal preferences influenced by various factors such as culture and experience.
Realization that people’s lists of wants are continuously evolving due to changing experiences and societal influences.

The true cost of a choice is defined as the opportunity cost, which represents the value of the best alternative forgone.
Example: Choosing to buy a DVD versus two books illustrates opportunity cost.

What to Produce?: Societies must decide on the goods and services to produce based on scarce resources.
How to Produce?: Optimal resource utilization is critical, considering moral and ecological impacts.
For Whom to Produce?: Decisions on distributing goods/services among the population, addressing inequalities.

Refers to the assumption that other factors remain constant while examining one specific change.

Task 1.1: Analyze the opportunity cost in food versus fuel scenarios, focusing on government implications, farmers' trade-offs, and consumer behavior.
Task 1.2: Evaluate the challenges posed by an ageing population in China as linked to previous population control policies.