The Economic Problem

Key terms: Definition: Opening consume The consume of forfeiture out on the present best choice. Economic commodities Commodities that are neglecting and consequently entertain an opening consume. Unconditional commodities Commodities that entertain no opening consume, e. G. Air Factor bargain The bargain for the factors of formation that constitute other commodities and strives such as drudge or raw materials. Unconditional bargain arrangement One in which there is very scant synod involvement in providing commodities and strives. Division of drudge Dividing one drudgery into frequent slight ones. Value Judgments Opinions or statements which insist on the views of the individual Normative statements Opinions that cannot be proven or tested. Positive statements Statements that can be tested abutting veritable globe basis. Factors of Production: 1 . Fix [Resources] 2. Drudge [Workers 3. Important [Money or Machinery] 4. Enterpsoar [Entrepreneurs] Economic Objectives: Government/ State [Want to impart out grants to new businesses as they succeed constitute past Jobs and pay a corporeal quantity of tax which succeed go into the arrangement] Consumers [They neglect amiable aimency and the product/strive to be at a amiable compensation The Economic Height By Nicole_Streaky hinder launched conditions, and Job shelter. Also some workers succeed confirm a inferior pay if other benefits issue, egg. Healthcare. Firms/ Business [Their ocean external is to maximize profits. Also to lavish close on raw materials] Prices & Profits entertain three key businesss: 1. Incentive business 2. Rationing business 3. Signaling business When compensations soar consumers aim to ration (cut down) their require. When compensations drop consumers exaim their require (an end to rationing). The Formation Possibility Boundary (BP) The key height in economics is that we entertain to constitute choices, accordingly there are not sufficient media to prepare anything we neglect. The shortage is unconcealed as deficiency. However, if we chose to use the media to product one amiable or strive, we cannot use them to product colossus else. Giving up the 'colossus else' is denominated the opening consume. If there is no opening consume in pliant colossus, it is unconcealed as a unconditional amiable. The media we can use are separated into foul-mouthed types; fix, drudge, important and work. Collectively, they are understand as factors of formation and the key means in bargain economics in deciding where they are used is the compensation means.