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1) Definition of economics :

 A social science that studies how people make choices on allocating scarce resources to
fulfill their unlimited wants.

2) Microeconomics & macroeconomics (compare) :

 Microeconomics is the studies of individual economic units for example households, firms &
government.
 Macroeconomics is the studies of the aggregate behaviour of the entire economy for
example inflation, unemployment, and economic growth.

3) Basic economics concepts (scarcity, choice & opportunity cost)

 Scarcity-all economic problems stem from the fact our needs and wants are unlimited, but
our resources are limited
 Choice- individuals , businesses and governments all make choices in the daily course of the
actions in any type of economy
 Opportunity cost-it is real cost or value of a product or service compared to an alternative

4) Basic economic problems ( what to, how to & to whom to produce) :

 What to produce : The type & quantity of good and services that it will produce which
reflects consumers' preferences.
 How to produce : Cheapest and efficient method to produce g & s. Labour intensive, land
intensive, capital intensive.
 For whom to produce : Distribution of output depends upon distribution of income.

5) Types of economic system (features, economic decisions regarding economic problems &

example of country) :

 An economic system serves as a regulatory system for controlling different aspects of

production and distribution, including capital, labor, land and other physical resources. In an
economic system, there are many essential entities, agencies and decision-making
authorities.
 Economic systems can be categorized into four main types: traditional economies, command
economies, mixed economies, and market economies.