Economics Definition: Economics is the science that studies human behaviour as a relationship between ends and scarce means with alternative uses (Lionel Robbins).
Economics is the study of the economy, mainly from the following aspects:
(1) Study how agents choose to allocate limited resources (rationality)
(2) use the scientific method (equilibrium and empiricism) to study these questions
(3) Study how these choices affect social welfare (efficiency)
Positive economics describes the actual behaviour of economic agents. Normative economics suggests what economic agents and society should do.
Microeconomics is the branch of economics that studies the allocation of resources and its impact on efficiency among individual economic agents, markets, firms, and governments. Macroeconomics is the branch of economics that studies the overall economic performance of the interactions between markets, firms and governments at national, regional and global levels.
The factors of production (FOPs) refer to the resources used in production: capital (human resources), land (natural resources) and labour (human resources). Allocating limited resources comes with trade-offs. Opportunity cost is the best option when getting something you have to give up. Rationality means that economic agents try to optimize and choose the best possible solution based on their information and capabilities.
The production possibility frontier (PPF) shows the various combinations of output an economy can produce given the available factors of production.
A marketplace is an institution where buyers and sellers of the same good or service come together to trade.
Demand shows how much good consumers plan to buy at every imaginable price. Quantity demanded (QD) refers to the purchase plan for a specific price (P). The law of demand states that as the price increases, the quantity demanded decreases and vice versa (as consumers are relatively worse off and substitute other products).
The above are the relevant points of ECON1020-Prices and Markets. Students who need detailed information and help can log in to GPA to check or add our customer service GPA Expert to receive more benefits and help.
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