SUMMARY

• Below is a concept map to help you visualise the content scope of this topic.

  

• Economics is a study of how individuals and society distribute limited resources to fulfil unlimited wants. Economic research focuses on choices made by the society.
• Choices have to be made as a result of the problem of scarcity. Thus, choices involve opportunity cost. Opportunity cost is the value of the best alternative foregone.
• Problem of scarcity arises because of limited resources and insatiable wants and needs. Thus, emerges the questions of what should be produced, how the production process is being carried out and who will obtain the goods. These three questions are resolved based on the economic system chosen by the society.
• Economic research consists of micro and macro researches. Microeconomics involves the study towards individual units while macroeconomics view the economy as an aggregate.
• There are four main types of economic system; the traditional system, free market system, centrally-planned system and mixed economy system. However, most economies are based on the mixed economy system due to the intervening roles of the government.