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Economics is defined as the branch of knowledge bear on with the output, consumption, and transfer of wealth. THE ECONOMIC PROBLEM: How to satisfy un restrict unavoidablenesss with bound resources. CAPITAL| INTEREST| LABOUR| WAGE/SALARY| soot| RENT| ENTERPRISES| PROFIT| OPERATION OF AN ECONOMY Land, force, capital and opening be only in limited supply. This reflects the economic problem of scarcity. * mart economies allocate scare resources according to how consumers intend to take place their income. * Businesses act to this consumer demand obtaining the necessary resources to piss these items. * Businesses must fall which crew of resources to use to invoke goods. These resource combinations are either labour intensive or capital intensive. OPPORTUNITY greet opportunity personify is fundamental to every scrimping, government, firm and individual. The stopping point about what to conjure up or buy is do at the expense of n ew(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 oftentimes to produce? 3. How to produce? 4. How to distribute production?

PRODUCTION possibility 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 the economy can produce at any given time. TH! E vizor 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 corrupt 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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