Read the summary and the most important questions on Economics European Edition | 9781292147826 | MICHAEL. PARKIN; Melanie Powell; Kent Matthews

• 1 What is Economics?

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• 1.2 Two Big Economic Questions

• What are the two big questions that summarise the scope of economics?

  1. How do choices end up determining what, how and for whom goods and services get produced?
  2. When do choices made in the pursuit of self-interest also promote the social interest?
     

• 1.2.1 What, How and for Whom?

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• What are Goods and Services?

  Goods and services are objects that people value and produce to satisfy wants

• What are the Four Factors of Production?

  1. Land - Natural resources that are used to produce goods and services
  2. Labour - Time and effort that people devote to producing goods and services
  3. Capital - Tools, instruments, machines, builings and other constructions that are used to produce goods and services
  4. Entrepreneurship - The human resource that organises land, labour and capital
     

• 1.3.2 Making a Rational Choice

• What is a rational choice?

  A rational choice is one that compares costs and benefits and achieves the greatest benefit over cost for the person making the choice

• 1.3.4 Cost: What You Must Give Up

• What is Opportunity Cost?

  The Opportunity Cost of soemthing is the highest valued alternative that must be given up to get it.

• 1.3.5 How Much? Choose at the Margin

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• What is the Marginal Cost?

  The opportunity cost of an increase in an activity is called Marginal Cost.

• 3 Demand and Supply

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• 3.1.1 A Competitive Market

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• What is the Money Price?

  The Money Price is the price of an object is the number of euros that must be given up in exchange for it.

• What is a Competitive Market?

  A Competitive Market is a market where there are many buyers and sellers, so no single buyer or seller can influence the price

• 3.2.2 Demand Curve and Demand Schedule

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• What is a Demand Curve?

  A Demand Curve shows the relationship between the quantity demanded of a good and its price when all other influences on consumers planned purchases remain the same.

• 3.2.3 A Change in Demand

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• What is a Change in Demand?

  When any factor that influences the buying plans other than the price of the good changes, there is a Change in Demand.