1-the basic economic problem

opportunity cost

next best alternative given up when we make a choice. in other words , real cost of chossing a thing and not the other.

entrepneur

one who combines land, labour and the capital. profit

labour

physical or metal effort used by human. wages

captial goods

products demanded by theproducerfor producing other goods. Cannot satify human needs and wants directly. ex-machinary, tools etc

public goods

provided by government in a society to everyone, who can afford to pay for the same. They are non exudability, and non rivarly. transport etc

consumption

the utilization of economic goods to satisfy needs or in manufacturing

consumer goods

directly demanded by the consumer and can satify needs and wants directly.

captial

factor to produce goods. interest

free goods

gift of nature-avaiable on earth. hence no opportunity cost is given up.

merit goods

goods or services that the government feel the people, left to themselves, will UNDERCONSUME and which therefore ought to be subsidized or provided free to users; can be provided both publicly or privately but is usually provided publicly-->generate positive externalities

economic goods

A good or service that is relatively scarce and so has a price. An opportunity cost is involved when it is consumed. pen, car, etc.

scarcity

A situation in which unlimited wants exceed the limited resources available to fulfill those wants

resources

anything which helps to satisfy our needs and wants. For example food, fossil fuels etc

land

gift of nature. factor cost: rent forest etc

charactericta of an entrepnuer

risk taking creative motivating -welll communicating planning adaptability in market situation coordinating

non durable goods

satify wants directly, but can be used only one time.

durable goods

satisfy wnats directly, but can be used mulitple times.

the basic economic problem

scarcity. It arises because human are unlimited and the resources are limited. hence, it is not possible to satisfy everything for everyone.

Production possibilty curve

shows max. combition of goods and services that can be produced by an economy in agiven period of time with its limited resources.

wants

the goods and services which are essential for survival, but add luxury to our lives. car, AC, perfume etc.

Needs

the goods of services which are essential for survival. water, food etc.

economic

Economics is about economizing. i.e. Making the most of what we have.

factors of production

Land, labor, and capital; the three groups of resources that are used to make all goods and services