Price Elasticity of Demand (PED) The law of demand states that when there is an increase in price, there will be a fall in quantity demanded Economists are interested by how much the quantity deman...
Demand Demand is the amount of a good/service that a consumer is willing and able to purchase at a given price in a given time period If a consumer is willing to purchase a good, but cannot afford ...
Rational Decision Making When analysing markets, a range of assumptions are made about the rationality of economic agents involved in the transactions In classical economic theory, the word ...
Free Market, Mixed & Command Economies In order to solve the basic economic problem of scarcity, economic systems emerge or are created by different economic agents within the economy Th...
Specialisation & The Division of Labour Scotsman Adam Smith is often referred to as the 'father of Economics' He published 'The Wealth of Nations' in March 1776 and explained many fundam...
Production Possibility Frontiers The Production Possibility Frontiers (PPF) model is an economic model that considers the maximum possible production (output) that a country can generate if ...
The Basic Economic Problem: Scarcity The basic economic problem is that resources are scarce There are finite resources available in relation to the infinite wants and needs that humans have...
Positive & Normative Statements Positive economics is concerned with objective statements of how a market or an economy works These positive economic statements are based on empirical ev...
The Process of Developing Models Economics is a social science It studies societies and the human interactions within those societies Human interactions are complex and are influenced by man...
