Economics is the study of how society sets its priorities in managing its scarce resources.

Scarcity refers to the society’s inability to produce all the goods and services people desire to have because of deficiency of resources.

The opportunity cost of a desired item or outcome to a person is what that person has to give up to get that item or to achieve that outcome

It is a graph that shows the combinations of output that a firm or a society can possibly produce using the available production technology and the given amount of inputs.

Efficiency refers to the ability to put a given amount of scarce resources into use in such a way to produce the highest level of output that could be produced with the available production technology.

Equity refers to the distribution of resources fairly among members of the society

The term marginal is used frequently in economics to refer to small incremental adjustments made on an existing plan of action.

A market failure occurs when the market falls short of allocating resources efficiently.

An externality is the one that often has unintended impact that an economic actor’s actions on the well being of another actor who stands by.

Market power is the ability of a single actor (or a few actors) to control or substantially influence market prices.

Microeconomics is the a main branch of economics that studies the behavior and decisions of the smallest decision units such as individuals or households and firms.

Macroeconomists study how a country’s economy as a whole is structured and works, by paying particular attention to the effects of monetary and fiscal policies pursued by the government.

Inflation is the increase in the general price level (or overall level of prices) in the economy within a given period of time.

The primary determinant of productivity is the level of investment in physical capital (all machinery and equipment used in production), and investment in human capital (improvement of people’s productive skills through education and training). Thus, investment is the recipe for increasing economywide productivity levels.

Scientific method involves the development of theories after careful observation of the relevant behavior of economic agents and real world phenomena, and then putting those theories to test by using data.

Positive statements in economics are statements that intend to describe how things are and how things actually work.

A normative statement is a prescriptive statement, like the ones expected to be made by a policy adviser, involving normative judgements and prescriptions about how the world should be.

Thinking at the margin requires recognizing the need to make decisions by evaluating the costs and benefits of marginal changes. It means that a decision maker should compare the marginal benefit and the marginal cost of his/her actions. Any action should be undertaken only if the benefit is greater than the cost. For example, the decision concerning whether to go to a university for an advanced degree or not must be made by comparing the costs (the fees and foregone wages) with the expected benefit (the extra income you could earn with the extra year of education).

What to produce?

How to produce?

For whom to produce?

All you can eat restaurants

Unlimited night usage on cell phones

Discounted rides for senior citizens

Discounts in fairs on last days