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Chapter 1: The Market System: Scarcity, Choice and Opportunity Cost,…

- - - - A statement that in principle, is capable of being refuted by reference to evidence.
    - - A statement of value or subjective opinion that cannot be proved or disproved by an appeal of facts
      - Looks at the outcomes of economics behaviour and questions whether they are good or bad
    - - Entrepreneurship
      - Capital
      - Labour
      - Land
    - - Marginal Benefit
        
        Additional benefit gained from consuming or producing one more unit of the good/service.
      - Marginal Cost
        
        Additional cost incurred from consuming or producing one more unit of the good/service
      - Decision Making Framework
        
        Constraints
        
        Opportunity Cost
        
        Costs and benefits
        
        Data
        
        Perspectives
        
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      - Concepts of Efficiency
        
        Economic Efficiency
        
        A situation where each good is produced at the minimum cost and where individual people and firms get the maximum benefit from their resources.
        
        Productive Efficiency
        
        When the firms in an economy are producing the maximum output for the given amount of inputs, or producing a given output with the least cost combination of inputs.
        
        Allocative Efficiency
        
        When the current combination of goods and services produced and consumed allows the society to attain the greatest level of satisfaction,
      - The Production Possibility Curve
        
        Shows the maximum attainable combinations of two goods and services that can be produced in an economy, when all the available resources are used fully and efficiently, at a given state of technology
        
        Assumed that:
        a) the economy only produces two goods or services.
        b) production is observed over a specific time period.
        c) the quantity and quality of the resources used remain the same over the specific time period.
        d) resources are fully employed and efficiently utilised.
        e) there is no change in the level of technology.