Economics Notes:

Economics - A study of how man can satisfy his

unlimited needs and wants with limited resources.

Trade-off - Exchange something of value for another.

Opportunity cost -
• Second best alternative foregone
• Value of the alternative given up to obtain another item.
1. High opportunity cost
• Less benefits
• More setbacks
2. Low opportunity cost
• More benefits
• Less setbacks
Macroeconomics - Activites and decisions made by large economic units
(government, labor sector, monetary institution etc.)
Concepts:
•Employment
•Inflation
•National income
•Development
•Economic sectors:
• Industry sector
• Services sector
• Public sector
• Finance sector
• Foreign sector
• Agricultural sector
Microeconomics - Activities and decisions made by small economic units,
or inidviduals.
The concerns of economics:

What to produce?
Producers must know and produce what the people need.

How to produce?
Methods of production:
• Labor-intensive - The use of manpower / labor for production.
• Capital-intensive – The use of machinery / automated tech for
production.

How much to produce?

Producers should know how much of a particular product they must
produce. The quantity in which a commodity is to be produced is set at that
level where demand must be equal to the supply. Avoid surplus production,
this may make business go bankrupt.

For whom to produce?

Finding markets for products. Which demographic would be interested in
the products?
For example, Japan makes more diapers for adults than for babies
because it has a higher population of older people than the younger
generation.

How to produce more over time?

Economic growth is the capacity of a country to produce adequate amounts
of goods and services over time to sustain the needs and wants of people.