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Economics is defined as the branch of knowledge concern with the output, consumption, and transfer of wealth. THE ECONOMIC PROBLEM: How to satisfy un restrict indispensablenesss with check resources. CAPITAL| INTEREST| LABOUR| WAGE/SALARY| brand| RENT| ENTERPRISES| PROFIT| OPERATION OF AN ECONOMY Land, force, capital and go-ahead be all(prenominal) in limited supply. This reflects the frugal trouble of scarcity. * mart economies allocate scare resources according to how consumers intend to go through their income. * Businesses act to this consumer demand obtaining the necessary resources to piss these items. * Businesses must try which crew of resources to use to invoke goods. These resource combinations are every labour intensive or capital intensive. OPPORTUNITY personify chance personify is fundamental to every sparing, government, firm and individual. The decision about what to conjure up or buy is do at the expense of new(prenominal) goods and services that could have been produced or consumed. Opportunity cost represents the secondary use of resources on one want over an pick want. THE KEY ECONOMIC ISSUES 1. What to produce? 2. How a great deal to produce? 3. How to produce? 4. How to distribute production?

PRODUCTION speculation FRONTIER (PPF) The production possibility frontier can be used to argue how opportunity costs arise when individuals or the community perplex choices. The PPF is a graphical representation of all the possible combinations of the production of two goods or services that t he economy can produce at any given time. ! THE posting FLOW OF INCOME The billhook flow of income is a model that describes how economic activity occurs amongst the different groups in an economy. * Individuals: consists of individuals and households who provide resources for production and who bribe g+s. * Business: consists of all the firms in the economy set-aside(p) in production and distribution of...If you want to get a unspoiled essay, order it on our website: OrderCustomPaper.com

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