Basic Economics Flashcards
1
Q
Who are the 3 economic agents and what are their objectives
A
Rational Consumer (to maximise satisfaction or utility)
Producer (maximise profit)
Government (social welfare of citizens)
2
Q
What is the basic economic problem
A
Scarce resources
Infinite wants vs finite resources
What? How? Why?
3
Q
What is an opportunity cost
A
Next best option foregone
4
Q
What are 4 types of opportunity costs
A
1) work leisure
2) government investments
3) investments today for consumption tomorrow
4) use of scarce farming land
5
Q
What does ppf stand for
A
Production possibility frontier
6
Q
What is the definition of ppf
A
Maximum production potential of the economy
7
Q
Name 4 Ways of rationing scarce resources
A
Market price
Assessment of needs
Education level
Consumer incomes
