Key Concepts in Economics

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Economics is the study of how people use resources to satisfy their needs and wants.

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The study of resource allocation

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What is the definition of Economy?

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A system of production, distribution, and consumption of goods and services.

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Positive Economics is concerned with: Describing and explaining economic phenomena, Prescribing economic policies, Evaluating economic outcomes, Judging economic fairness

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Describing and explaining economic phenomena

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Normative Economics is concerned with:

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Making value-based judgments about economic policies

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Scarcity in economics refers to the limited nature of resources in comparison to the unlimited wants and needs of people.

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The limited nature of resources in comparison to the unlimited wants and needs of people.

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Define Tradeoff in economic terms.

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The balance achieved between two desirable but incompatible features.

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Cost-Benefit Analysis is a method used to:

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Evaluate the financial implications of a decision

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What is the concept of Incentive in economics?

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A reward or punishment that motivates behavior

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Which of the following best describes Economic Systems?

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A set of principles and techniques by which a society decides and organizes the ownership, allocation, and distribution of resources.