FYJC Economics (Maharashtra State Board)
Chapter 1: Basic Concepts in Economics – Study Notes
1. Meaning of Economics
Economics is the social science that studies how individuals and society use limited resources to satisfy
unlimited human wants. It focuses on the production, distribution, and consumption of goods and services.
2. Wants
Human wants refer to desires for goods and services that provide satisfaction. Wants are unlimited and
keep increasing as society develops.
• Characteristics of Human Wants:
• Unlimited – Human wants never end.
• Recurring – Once satisfied, they arise again.
• Competitive – Some wants compete for the same resources.
• Complementary – Some wants require other goods to satisfy them.
3. Resources (Factors of Production)
Resources are the inputs used to produce goods and services. These are limited in supply compared to
human wants.
• Main Factors of Production:
• Land – Natural resources like soil, water, forests, minerals.
• Labour – Human effort used in production.
• Capital – Man■made tools, machines, and buildings used for production.
• Entrepreneur – The person who organizes other factors and takes risks.
4. Scarcity
Scarcity means limited availability of resources in comparison to unlimited human wants. Because of
scarcity, individuals and society must make choices about how resources are used.
5. Choice
Choice refers to selecting the most important want to satisfy when resources are limited. People must
prioritize their needs due to scarcity.
6. Opportunity Cost
Opportunity cost is the value of the next best alternative that is sacrificed when a choice is made. For
example, if a student spends time studying Economics instead of watching a movie, the movie is the
opportunity cost.
7. Types of Goods
• Free Goods – Available in nature without cost (air, sunlight).
Chapter 1: Basic Concepts in Economics – Study Notes
1. Meaning of Economics
Economics is the social science that studies how individuals and society use limited resources to satisfy
unlimited human wants. It focuses on the production, distribution, and consumption of goods and services.
2. Wants
Human wants refer to desires for goods and services that provide satisfaction. Wants are unlimited and
keep increasing as society develops.
• Characteristics of Human Wants:
• Unlimited – Human wants never end.
• Recurring – Once satisfied, they arise again.
• Competitive – Some wants compete for the same resources.
• Complementary – Some wants require other goods to satisfy them.
3. Resources (Factors of Production)
Resources are the inputs used to produce goods and services. These are limited in supply compared to
human wants.
• Main Factors of Production:
• Land – Natural resources like soil, water, forests, minerals.
• Labour – Human effort used in production.
• Capital – Man■made tools, machines, and buildings used for production.
• Entrepreneur – The person who organizes other factors and takes risks.
4. Scarcity
Scarcity means limited availability of resources in comparison to unlimited human wants. Because of
scarcity, individuals and society must make choices about how resources are used.
5. Choice
Choice refers to selecting the most important want to satisfy when resources are limited. People must
prioritize their needs due to scarcity.
6. Opportunity Cost
Opportunity cost is the value of the next best alternative that is sacrificed when a choice is made. For
example, if a student spends time studying Economics instead of watching a movie, the movie is the
opportunity cost.
7. Types of Goods
• Free Goods – Available in nature without cost (air, sunlight).
