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central THINKING in ECONOMICS. (THE 10 PRINCIPLES OF ECONOMICS. (People…
central THINKING in ECONOMICS.
The central CONCEPTS.
How people make use of SCARCE resources.
"ECONOMY" means "one who manages a HOUSEHOLD".
THE 10 PRINCIPLES OF ECONOMICS.
People face TRADE-OFFS.
COST of anything = something GIVEN UP to get it.
RATIONAL people think at the MARGIN.
TRADE can make people BETTER OFF.
MARKETS are usually good way to ORGANISE economic activity.
GOVERNMENTS can sometimes IMPROVE market outcome.
STANDARD OF LIVING depends on country's ability to produce GOODS AND SERVICES.
government prints too much MONEY = price RISES.
short-term INFLATION-UNEMPLOYMENT trade-off.
The ECONOMIST way of THINKING.
SCIENTIFIC method.
Use of ASSUMPTIONS.
MODEL thinking.
Circular flow diagram.
Production possibility frontier.
POSITIVE and NORMATIVE analysis.
POSITIVE economics.
AVOID value judgment. DEFINE the world as it it.
NORMATIVE economics.
WITH value judgement. use of DISCRETION in determine what is best for the world.
Central concepts in market ORGANISATION.
COMPARATIVE advantage.
specialisation/DIVISION of labour.
ABSOLUTE advantage.
one party is more superior in PRODUCTIVE CAPABILITY in production of all goods.
OPPORTUNITY cost.
