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Summary Chapter 1 - What economics is all about
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This document extensively covers the first learning unit of Economics 1A. It is summarised and colour-coded. These study notes were made by an A+ student.
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Chapter 1: Whateconomics is all
about
1.1 What is economics?
, Economics – Economics is the study of the use of scarce resources to satisfy
unlimited human wants. It deals with the choices that people have to make.
Economists seek to describe, explain, analyse, and predict.
Scarcity – not enough resources to satisfy all wants (unlimited wants, limited
resources)
This leads us to the need to choose.
1.2 Scarcity, choice, and opportunity cost
Wants Human desires for goods and services
Unlimited
We always want more or better goods/services
Needs Necessities – essential for survival
Not unlimited
Eg: food, water, shelter, clothing
Demand If those who want to purchase it have the necessary
means to do so
Resources:
Limited, scarce, not freely available
Are the means by which goods can be produced or services offered
Also called: Factors of production
Types
Natural resources Agricultural land, minerals, and fishing resources
Human resources Labour
Man-made resources Machines
There is always cost involved in any use of scarce resources.
Scarcity and choice:
Demand is greater than the availability
Scarcit Affects everyone
y
Some of the unlimited wants have to be
sacrificed to meet the fulfilmet of other wants
Choice Choice = sacrifice of money and opportunity
Everytime a choice is made opportunity costs
are incurred
Opportunity cost:
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