Cheatography
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Scarcity, Choice & Resource Allocation & Decision-Making Process of Economic Agents
This is a draft cheat sheet. It is a work in progress and is not finished yet.
What is Economics
Economics is the study of how human beings making choices to best allocate limited resources among competing uses, to maximise and improve welfare |
What is the Central Economic Problem
Scarcity : A situation where limited resources available is insufficient to fulfil the unlimited wants of society |
Due to scarcity, economic agents have to make choices/decisions |
What is opportunity cost
When making choices, we may have to give up the next best alternative |
Opportunity cost refers to the value of the next best alternative forgone when making a choice |
Note: when asked to calculate opportunity cost, consider only the next BEST alternative and not all the alternatives available |
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