Introductory Concepts

In order to make predictions in Economics, we

often make the assumption ceteris paribus

which means all other things remain constant.

Is concerned with the

making of goods.

Is the using up of goods

and services.

Is the swapping of goods/service and/or 

money for each other.

Are good that are wanted directly

by consumers, they are the end result of

production and manufacturing and are what a

consumer will see on the store shelf. 

Clothing, food, automobiles and jewelry are

all examples of consumer goods. 

Are goods that are wanted directly by

consumers and will be used up over a long

period of time. 

Are goods that are made

for use by producers.

Is the name given to the inputs used in the

production process.

Is the input that

provides the workforce.

Inputs which are man

made, eg. machinery.

Is the inputs which include all

natural resources.

Is the organiser of the other inputs, they

make all the decisions concerning production

and bear all the risk.

The basic economic

problem.

When a consumer makes a choice, he will

choose the goods which give him maximum

utility or satisfaction.

The cost of the next best alternative

foregone.

Or the cost of the next best alternative one

gives up to consume the good

one chooses.