➡️ Scarcity is the fundamental economic problem of having limited resources to meet unlimited wants and needs.
➡️ Choice is the process of making decisions about how to use limited resources to satisfy unlimited wants and needs.
➡️ Opportunity cost is the cost of the next best alternative that is given up when a decision is made.
➡️ Scarcity, choice and opportunity cost are all related and are the basis of economic decision making.
➡️ Understanding these concepts is essential for making informed economic decisions.

➡️ Opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action.
➡️ It is the cost of the next best alternative that is given up when a decision is made.
➡️ Opportunity cost is an important concept in economics, as it helps to explain why certain decisions are made and why resources are allocated in a certain way.
➡️ Opportunity cost is a key factor in decision-making, as it helps to determine the most efficient use of resources.
➡️ Opportunity cost is also used to measure the economic value of a decision, as it takes into account both the cost of the chosen action and the cost of the forgone alternative.

➡️ Economics is a social science that studies how individuals, businesses, governments, and societies allocate resources to produce, distribute, and consume goods and services.
➡️ It focuses on the behavior and interactions of economic agents and how economies work.
➡️ It also examines the effects of different economic policies on the production, distribution, and consumption of goods and services.
➡️ Economics is divided into two main branches: microeconomics and macroeconomics.
➡️ Microeconomics studies the behavior of individual economic agents, such as households and firms, and how they interact in markets. Macroeconomics studies the behavior of the economy as a whole, such as the effects of economic growth, inflation, and unemployment.

➡️ In the short run, economic decisions are made with the expectation that some factors will remain constant, while others will be able to adjust. This is because the short run is a period of time in which some factors of production are fixed, while others are variable.

➡️ In the long run, all factors of production are variable and can be adjusted to meet the needs of the economy. This allows for more efficient use of resources and greater flexibility in economic decision-making.

➡️ In the very long run, economic decisions are made with the expectation that all factors of production are variable and can be adjusted to meet the needs of the economy. This allows for more efficient use of resources and greater flexibility in economic decision-making.

➡️ The time period of an economic decision is important because it affects the type of decisions that can be made. Short-run decisions are typically more short-term in nature, while long-run decisions are more long-term in nature.

➡️ The time period of an economic decision also affects the type of data that is used to make the decision. Short-run decisions are typically based on more current data, while long-run decisions are based on more historical data.

➡️ Scarcity is the fundamental economic problem that arises due to the finite nature of resources and unlimited wants of individuals.
➡️ It is the condition in which the available resources are insufficient to satisfy the wants of individuals.
➡️ Scarcity forces individuals to make choices about how to allocate their limited resources in order to satisfy their wants.
➡️ Scarcity leads to opportunity cost, which is the cost of the next best alternative that is given up when a decision is made.
➡️ Scarcity also leads to trade-offs, which are the sacrifices that must be made in order to obtain a desired outcome.

➡️ Allocation of resources is the process of assigning resources to different uses in order to maximize efficiency and productivity.
➡️ It involves decisions about what, how, and for whom to produce goods and services.
➡️ The allocation of resources is based on the principles of scarcity, opportunity cost, and marginal analysis.
➡️ The allocation of resources is determined by the market forces of supply and demand.
➡️ Government policies, such as taxes, subsidies, and regulations, can also influence the allocation of resources.

➡️ Positive statements are objective statements that describe how the economy works and are based on facts. They are testable and can be proven true or false.

➡️ Normative statements are subjective statements that express opinions or value judgements about how the economy should work. They are not testable and cannot be proven true or false.

➡️ Positive statements are used to make predictions about the future of the economy, while normative statements are used to make policy recommendations.

➡️ Positive statements are often used to inform economic decisions, while normative statements are used to influence economic decisions.

➡️ Positive and normative statements are both important for understanding the economy and making informed decisions.

➡️ Factors of production are the inputs used to produce goods and services.
➡️ Land refers to natural resources such as land, minerals, and water.
➡️ Labour refers to the human effort used to produce goods and services.
➡️ Capital refers to the financial resources used to produce goods and services.
➡️ Enterprise refers to the organization and management of the other factors of production.

maximize economic welfare

➡️ Individuals, firms, and governments must make choices in order to maximize economic welfare.
➡️ These choices involve the allocation of scarce resources in order to produce goods and services that satisfy the wants and needs of society.
➡️ The goal of economic decision-making is to maximize the benefits of these choices while minimizing the costs.
➡️ This requires an understanding of the trade-offs between different choices and the ability to weigh the costs and benefits of each option.
➡️ In order to make the best decisions, individuals, firms, and governments must consider the impact of their choices on both the short-term and long-term economic welfare of society.

➡️ Economic methodology is a branch of economics that focuses on the development and application of methods for analyzing economic phenomena.
➡️ It is concerned with the identification of economic models, the development of theories, and the testing of hypotheses.
➡️ Economic methodology is used to analyze the behavior of individuals, firms, and markets, as well as the effects of government policies.
➡️ It is also used to evaluate the efficiency of economic systems and to assess the impact of economic policies.
➡️ Economic methodology is closely related to other fields such as econometrics, game theory, and decision theory.

➡️ Ceteris paribus is a Latin phrase meaning ➡️all other things being equal➡️.
➡️ It is used in economics to refer to a situation where all other factors are held constant.
➡️ This allows economists to isolate the effect of a single variable on an economic outcome.
➡️ Ceteris paribus is used to make predictions about the future based on the current economic conditions.
➡️ It is also used to compare different economic scenarios and to analyze the impact of policy changes.

➡️ Human capital refers to the knowledge, skills, and abilities of individuals that can be used to create economic value. It is the sum of the investments made in people, such as education, training, and experience.
➡️ Physical capital, on the other hand, refers to the tangible assets used to produce goods and services. Examples of physical capital include buildings, machinery, tools, and equipment.
➡️ Human capital is intangible and cannot be bought or sold, while physical capital is tangible and can be bought and sold.
➡️ Human capital is more difficult to measure than physical capital, as it is based on individual skills and abilities.
➡️ Human capital is important for economic growth, as it increases productivity and efficiency. Physical capital, on the other hand, is necessary for production and is essential for economic growth.