ECONOMICS: Is a social science that studies human behaviour when finite resources are used to produce goods and services to the satisfaction of infinite wants

CETERIS PARIBUS: Is a Latin phrase meaning all other things being equal 

SCARCITY (the basic economic problem): exists because resources are finite and wants are infinite 

OPPORTUNITY COST: Measures the cost of obtaining a quanitity of a good or service in terms of the quanitity of the next best alternative foregone 

A PRODUCTION POSSIBILITY CURVE: Shows the maximum combination of goods and services that can be produced by an economy in a given period of time assuming that all the resources in the economy are fully employed and…


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