Revision — Introductory concepts Seay: he vets esses ae ite buthurn ‘ane ad esa rite Tole re Scythe base ble se ay ‘os reac nab alate To econ ob (potralsoncs tl ae ape ae ceded be Sa ae to pepe’ ead fo, Operant east Cs ne be me baonze Sct pee dt hae re re, ‘hen choke smut, meting ea cin ‘The basic economic problem shout rationing scarce resourees are often xpresed in teams of three questions and are [eno a the bak economic problem. 1. What sould te produced and in what 2 How shoul things be proce? 5 Who should things be produced for? ‘The problem al eat to the allocation of Prodicion. Factors of production allow an Economy to produce i outpt (gods and Series, Economists separate resoures nto four factors of production. 1 Land =these are the natural eources toed To produce goods and serves for xarple land el amber, eer and The payment land set 1 Tatour=these ae the human resources that se wed to produce ponds and series This {nctes the workers that pote goods, such [Yactory workers and the workers that produce ervey, ach teacher The Seer | Shisemecon ee Sieoene Seon, Tahal tr pert pg le meting em he ret htt perp eee gods: ee gra suri sop ona toe {pol eared oppor pode Fe ope ant: ity san ces tn es eae ff zmahgw crests Uy eds esac tte ad ingore Capital — hinds al equipment machinery a Taoves that ae wie 0 Drie god and vies. Ctl nce fnything that war made by humans 2d ised to make goods and services. ‘The payment to capil sine. ‘+ Entrepreneurship managers) ~ this ft people when they are gig Topether the ote actors of production The payment to management prof Production possibilities curves (PPCs) 2 production possibilty curve PPC) shows the maxim combinations of gots and services tat can be proce bya economy In {ven time prod all the resoece in the tesa of eehaaigy xe 15 sad 1 so potential output. ‘Any pot inside the PCs possib et achieve iititmeane that no al of he facie of production inthe economy are beng sed andor ome ofthe acon ae beg wsedineicealy. producing within their FPS, since there are iceman Pe toler bea ferent PeFre ned es DY fanalways some unemployed factors of production Ina county. or enanpe theres nota single ‘There wil aways be some unemployment ivan ‘economy. no matter how stall ‘An outward shit ofthe PPC can only be achieved ifiereis an improveret in the quart anor ‘means that there isan increase Ia potent ‘ump ut ofcourse this doesnot necesany ‘mean ha there an increase in atl out there were to bea fallin the quay of foes ‘ot prodison the thi would ese the PPC to Positive and normative economics ‘Apostive statement onc that may be froven tobe ght o wrong by looking at the ‘opinion and cannot beconclutely proven o be "tor ong Is usualy easy spot because Positive economics desl with area of the ‘abject tat ae capable of being proven 19 be ‘omect or not. Normative economics dels with areas fe subjec thar ae open to ‘Soften more interesting dealing wth questions Iinnonmatve economic, even tous 2 Economic growth, economi development and sustainable development ‘onomnle growth ia increase in county ‘atonal ouput measur by an increas In os domestic product (GDP) It one-dimensional, ‘Soom development occurs then the tnd String ot a county carn s ipoving. Fone enoy more toes and mor eedoms ‘Though there are many develope indstors commonly weed one the Hua Development Index (HDI) Ths 9 composite development le expectancy. sn a tindertanding of he hea ofthe popalstonz Popilaons ad GDP per expita (at SPPP>. 10 fa an understanding of the pp tons access Sustainable development reso économie feteratons bu doer not coamronie the abilty ft Tutare generations to met ther ped Planned and free market economies sometimes calle cently planus economy. Ora command economy. deco at what to Bodies tang sl pron setapr an sot ‘es though coe planing Eeeons are Ina by the goverment on beh he people Pree market economies: In re market ‘Sonemy sometimes called «pie enterpie ‘Soom or captain, pices re wed to fation bros and eee al proton sin pate ‘Shou work tele tena rere ‘ould be few cases of surpluses nd shortages. Individuals make independent desis stout what produ they woul ket urchase at [Bren ces and producers then wake decions ‘hose products The producers desions ate ‘sed upon the kellhod of pots beng iad. "Supply toner meet the new demand pater, ‘A change i the demand of consumers sends “Signals that bring about a chai t events that realest aco of production snd maker sire tee market system is sels stm ‘Whats ileren she degre of he min from unt t county. Some count such as ‘hina have high evel of planning andRevlon joie oo EI Inthe seemingly ee ecopoies such asthe ental sac thee ate some dangers hat WA Usa, the UK-oF even Hong Kone government et the fee market et to aerate Wwihout Inersenvon very mucha par othe economic Interference. Disadvantages offre market economy _—==Dinadvantages ofa planned economy Demet mk (hig uta bad people aha og Tl adc ene ade td oars ‘scp wilbe msde die yh ee ama nny te mn eel fan ey posse mae (Slt il beruloaten deans aa od Sie at god (gst a godt peopl, achas | As fern pce st inept, eas ret be ‘chance cae) wlte npn sre ty ud ec. Mbt dos tbe ae 0 a> ‘lab podxedtr te whoo allem andtex_ he este eres ea Ano ain gine ners enn i ii pete aye opel pan en le eh mage pee reokssnme os rome Oto Some menbersol sy latte ate tk ells Ted the goverment may ld als thonodes sit onu tes alte gem posal antibod teal ala ene Lange ensayo ad dnt nis eg 0 Garena et te sae st mity Nabi stattneyardenesepm fe pn ty pcg ‘© our ie may te goal ads se yore parce tteThe foundations of economics Figs 1.2 The cedar ew fcr Fig The eet methods of ington ine {© OUP: thismay be reproduced for class use solely forthe purchaser's institute