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Economics Revision.
Economic problem.
Scarcity is a situation that arises because people have unlimited wants in the face of limited resources.
Opportunity cost in decision making is the value of the next best alternative forgone.

Market economy is one in which market forces are allowed to guide the allocation of…

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Capital goods: are to be used to increase the future capacity of the economy, investment goods

Merit goods: are goods that bring unanticipated benefits to its customers such that society believes that it should
be consumed by individuals regardless of whether they have the means or willingness to do so,…

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Government failure is a misallocation of resources arising from government intervention

Market failure: is a situation in which the free market mechanism does not lead to an optimal allocation of
resources e.g. where there is a divergence between marginal social benefit and marginal social cost

Taxation ­ Direct and indirect…

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