Eco (1 - Nature of Economics)

Students should be able to:

1. define the term “economics”;
2. explain what is meant by an economy;
3. list the main sectors in an economy;
4. explain the concepts of scarcity and choice within an economy;
5. define “opportunity cost” and “money cost”;
6. illustrate opportunity cost and efficiency, using the production possibility frontier;
7. list the main influences on individuals in making economic decisions;
8. list the main influences on firms in making economic decisions.

CONTENT
1. Economics as a Social Science:
(a) the creation of wealth out of scarce resources;
(b) the production and distribution of goods and services;
(c) the behaviour, interactions and welfare of those involved in the process;
(d) economics as a trade off.
2. An economy as a mechanism:
(a) organization of resources for production of goods and services;
(b) satisfaction of society’s needs and wants.
3. Main sectors in an economy.
4. Concepts of scarcity and choice.
5. Opportunity cost and money cost.
6. Illustration of Production Possibility Curve.
7. Influences on consumers in making economic decisions.
8. Influences on producers in making economic decisions