Chapter 1
Basic economic problem is concerned with how best to allocate scarce
Resources in order to Satisfy people’s unlimited needs and wants.
Economic agents are households, firms that operate in the private sector of
an economy and the government.
Private sector refers to economic activity of private individuals and firms. The
private sector’s main aim is to earn profit for its owners.
Public sector refers to economic activity directly involving the government,
such as the provision of state education and healthcare services. The public
sector’s main aim is to provide a service.
Goods are physical items such as tables, cars, toothpaste and pencils.
Services are non-physical items such as haircuts, bus journeys, telephone calls
and internet access.
Needs are goods and services that are essential for survival.
Wants are goods and services that are not necessary for survival but are
demanded by economic agents to fulfil their desires.
Economic goods are those which are limited in supply.
Free goods are goods which are unlimited in supply, such as air and seawater.
Hence, there is no opportunity cost in terms of their output.
Chapter 2
Factors of production refer to the resources required to produce a good or
service, namely land, labour, capital and enterprise.
Land is a natural resource required in the production process, such as oil,
coal, water, wood, metal ores and agricultural products.
Labour are the human resources required in the production process, including
skilled and unskilled labour.
Capital are the manufactured resources required in the production process,
such
as machinery, tools, equipment and vehicles.
Enterprise is a business person requires to combine and manage the
other three factors of production successfully.
Factors of rewards of production
Geographical mobility
Occupational mobility
Chapter 3
Opportunity cost
Chapter 4
Production possibility curve
PPC diagram
Chapter 5
Micro economics
Macro economics
Chapter 6
Market system
Market equilibrium
Market disequilibrium
Price mechanism
Chapter 7
Demand
Substitutes
Complements
Contraction
Extension
Market demand
Chapter 8
Supply
Extension
Contraction
Chapter 9
Market equilibrium
Equilibrium price
Market disequilibrium
Excess demand
Shortage
Surplus
Excess supply
Chapter 11
Price elasticity of demand
Price inelastic demand
Price elastic demand
Formula to calculate PED
Unitary price elasticity
Sales revenue
Sales revenue formula
Profit
Price discrimination
How to decide price elastic or inelastic demand
Chapter 12
Price elasticity of supply
Price elasticity of supply formula
Price inelastic supply
Price elastic supply
Stocks
How to decide price elastic or inelastic supply
Chapter 13
Market economy
Planned economy
Mixed economy
Chapter 14
Market failure
Private costs
External costs
Social costs
Private benefits
External benefits
Social benefits
Public goods
Merit goods
Demerit goods
Chapter 15
Mixed economic system
Maximum prices
Minimum prices
Indirect taxes
Subsidies
Privatization
Nationalization
Chapter 16
Money
Bartering
Central bank
Commercial bank
Chapter 17
Income
Disposable income
Current expenditure
Capital expenditure
Savings
Borrowing
Chapter 18
Worker
Wage factors
Non-wage factors
Demand for labour
Derived demand
Supply of labour
National minimum wage
Specialization of labour
Division of labour
Chapter 19
Trade union
Collective barging
Industrial action
Corporate social responsibility
Chapter 20
Firms
Primary sector
Secondary sector
Tertiary sector
Interdependence
Small firms
Large firms
Mergers
Takeovers
Franchise
Horizontal merger
Vertical merger
Conglomerate merger
Economies of scale
Internal economies pf scale
External economies of scale
Diseconomies of scale
Demerger