1. Introduction to Economics
Economics centers on how individuals and societies allocate their limited resources to meet infinite needs. The core challenges are scarcity, leading to the notion of opportunity cost, which emphasizes that every decision has a trade-off. Economies must address three pivotal questions: what to produce, how to produce, and for whom to produce. These inquiries are approached through various economic systems—market, planned, and mixed—while factors of production are critical to creating goods and services. Additionally, governments actively participate in managing economies and addressing issues created by globalization.
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What we have learnt
- Economics is the study of how people allocate scarce resources.
- Scarcity drives opportunity cost, influencing economic choices.
- Different economic systems determine how societies address fundamental economic questions.
Key Concepts
- -- Economics
- The social science that studies the production, distribution, and consumption of goods and services.
- -- Scarcity
- A condition where resources are limited while human wants are unlimited.
- -- Opportunity Cost
- The value of the next best alternative that must be given up when making a choice.
- -- Factors of Production
- The inputs used to produce goods and services, including land, labor, capital, and entrepreneurship.
- -- Economic Systems
- Different frameworks within which economic decisions are made, including market, planned, and mixed economies.
- -- Government Intervention
- The ways in which governments influence economic activity to ensure public welfare.
- -- Global Interdependence
- The economic connections among countries that result from trade, investments, and international policies.
Additional Learning Materials
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