Economics
Unit 1: What is Economics all about
Definition: Economics is the study of human behaviour as a social science as a relationship between
ends and scarce means that have alternative uses. Empirical science.
Ceteris Paribus= conditional law stating that provided all other things remain the same
Important elements:
Human Behaviour- Different human reactions in same conditions
Social Science- Social Experiments
Ends- *Returns on resources
Scarce Means- Limited resources
Resources and *Returns
! FACTORS OF PRODUCTION !
1. Capital= Interest Scarce Resources
2. Entrepreneurship= Profit Problem stands as how
3. Land= Rent to manage these
4. Labour= Salaries and Wages
Scarcity = Choice = Opportunity Cost
Scarcity= Resources limited in supply relative to demand (Permanent issue)
Choice= caused by scarcity
Opportunity cost/Implicit cost= Benefit of next best alternative given up. (Price to pay for forgone
option) Cost is attributed to next best. Opp. cost occurs every time a choice is made.
Dependent
Wants= Things we would like, but can live without. Unlimited wants-limited resources
on lifestyle
Wants include biological, spiritual , material, social and cultural. and income
etc
Needs= Things needed to survive
Not absolutely unlimited
Demand= Purchasing power, willingness and ability.
Unit 1: What is Economics all about
Definition: Economics is the study of human behaviour as a social science as a relationship between
ends and scarce means that have alternative uses. Empirical science.
Ceteris Paribus= conditional law stating that provided all other things remain the same
Important elements:
Human Behaviour- Different human reactions in same conditions
Social Science- Social Experiments
Ends- *Returns on resources
Scarce Means- Limited resources
Resources and *Returns
! FACTORS OF PRODUCTION !
1. Capital= Interest Scarce Resources
2. Entrepreneurship= Profit Problem stands as how
3. Land= Rent to manage these
4. Labour= Salaries and Wages
Scarcity = Choice = Opportunity Cost
Scarcity= Resources limited in supply relative to demand (Permanent issue)
Choice= caused by scarcity
Opportunity cost/Implicit cost= Benefit of next best alternative given up. (Price to pay for forgone
option) Cost is attributed to next best. Opp. cost occurs every time a choice is made.
Dependent
Wants= Things we would like, but can live without. Unlimited wants-limited resources
on lifestyle
Wants include biological, spiritual , material, social and cultural. and income
etc
Needs= Things needed to survive
Not absolutely unlimited
Demand= Purchasing power, willingness and ability.
