Basic Economic Concepts

Build a reliable foundation for A/L Economics by connecting scarcity, choice and resource allocation to the decisions made by households, firms and governments.

What you will learn

• Scarcity, choice and opportunity cost.
• Factors of production and the basic economic problem.
• Positive and normative economic statements.
• The central questions and broad forms of economic systems.

Study focus

For every decision, identify the scarce resource, the alternative chosen and the next-best alternative given up. That final alternative is the opportunity cost.

Exam reminder

Use a real-life example and explain the economic reasoning, not only the definition.