Basic concepts

Question 1

Definition of economics

Answer 1

it is the scientific study of how man uses scarce resources to produce goods and services to satisfy his wants

Question 2

Economy

Answer 2

is a mechanism where scarce resources are organized for the production of goods and services.

Question 3

Economic activity

Answer 3

are conducted in the economy ,main economic agents are households,firms and the government

Question 4

Scarcity

Answer 4

Since resources are scarce and wants are unlimited, scarcity exists, making choice involves opportunity cost

Question 5

Ppf

Answer 5

Economists use the old to show production in the economy,it can be used to illustrate scarcity,choice and opportunity . cost