Economics

• study of human behaviour in using scarce resource to satisfy unlimited wants

<aside> 🗣 Unlimited wants + Finite resources (limited supply) → Scarcity → need to make Choices

</aside>

Basic economic problem

• Allocation (分配) of a nation’s scarce resources between competing uses that represent infinite wants

| Resource allocation | The choice of the types and quantities of goods and services production The choice of production methods | | --- | --- | | Output distribution | The distribution of goods and services | | Income distribution | eg. Salary Tax |

Opportunity cost

• The best alternative (choice) is chosen, the next best alternative and its value foregone

Production possibility curve (PPC)

• Show the maximum productive potential/ quantity of goods of an economy
  • Show possible/ unobtainable production
    • Possible: inside/ along
    • Unobtainable: outside
  • Show fully employed/ unemployed resources
    • Fully employed: along
    • Unemployed: inside
• Show choice and opportunity cost

<aside> 💡 Capital goods are used to produce consumer goods

• Produce capital goods → more consumer goods in the future → lesser consumer goods now </aside>