ECB CH1-3

Economics is the social science that studies how rational individuals, groups, and organizations manage scarce resources, which have alternative uses, to achieve desirable ends.

• True

• False

Economics tries to explain and understand

• What goods and services societies produce

• How produce them

• For whom goods and services are produced.

• How manage scarce resources

Production is the ______ of inputs into outputs by firms in order to earn profit.

Classification of production

• Primary

• Secondary

• Tertiary

• Thirdly

 The production and extraction of natural resources, plus agriculture

The production from manufacturing and construction sectors of the economy

The production from the service sector of the economy

The act of using goods and services to satisfy wants, involves purchasing the goods and services.

Decision-making process involves ...

• choosing one product over the other

• choice that needs to be made with rational thinking

• choice to sacrifice (opportunity cost)

• All answers

Resource scarcity

• Implies that all resources are scarce in relation to the limitless wants present in every society

• a lack of ready availability

• Implies that all resources are not scarce in relation to the wants present in every society