Economics concepts(1):
• wants: want is desire;
• demand is a desire supported by the
ability($$$$$) to satisfy the desire:
• unlimited wants: for what we desire,
we always prefer more to less, and we have
new wants when other wants are satisfied.
Economics concepts(2):
• Scarcity-----$$$$$$$$
• there is scarcity when ever resources are
insufficient to satisfy all our wants
• fixed supply----$$$$$$$$
Economics concepts(3):
• Choice
• because of the scarcity, we have to make
choice, we have to choose which wants to
satisfy and which wants to give up.
Economics concepts(4):
• Opportunity cost
• the best alternative or highest-valued
option forgone
• If you choose choice (1), the opportunity
cost is the choice (2).
• If you choose choice (2), the opportunity
cost is the choice (1).
• If you choose choice (3), the opportunity
cost is the choice (1).
• Question:What is the opportunity cost if
you choose choice (4)????????????????
• Ans.: the opportunity cost is choice (1) if
you choose choice (4).
• For producers
• are concerned with what
goods and in what
quantities these goods are
to be produced
• For producers
• are concerned with the
method of production.
• For producers
• are concerned with who is
to get how much of
society’s output
• Social structure is rigid;
• changes take place slowly
• production methods are
primitive
• low standard of living
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•
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Private property rights
freedom of contract
decentralized decision-making
reliance on price competition
• Public ownership of productive
resources
• restriction on freedom of
contract
• centralized decision-making
• non-reliance on price
competition
• Features of tradition economy,
market economy and command
economy