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1. Basic economic ideas and resource allocation

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  1. 1.1 Scarcity, choice and opportunity cost

    1. 1.1.1Scarcity problem

      • Fundamental economic problem of scarcity

    2. 1.1.2Economic choice

      • Need to make choices at all levels (individuals, firms, governments)

    3. 1.1.3Opportunity cost

      • Nature and definition of opportunity cost, arising from choices

    4. 1.1.4Resource allocation questions

      • Basic questions of resource allocation - what to produce - how to produce - for whom to produce

  2. 1.2 Economic methodology

    1. 1.2.1Economics as social science

      • Economics as a social science

    2. 1.2.2Positive vs normative statements

      • Positive and normative statements (the distinction between facts and value judgements)

    3. 1.2.3Ceteris paribus

      • Meaning of the term ceteris paribus

    4. 1.2.4Time periods

      • Importance of the time period (short run, long run, very long run)

  3. 1.3 Factors of production

    1. 1.3.1Factors of production

      • Nature and definition of factors of production: land, labour, capital and enterprise

    2. 1.3.2Human vs physical capital

      • Difference between human capital and physical capital

    3. 1.3.3Factor rewards

      • Rewards to the factors of production

    4. 1.3.4Division of labour and specialisation

      • Division of labour and specialisation

    5. 1.3.5Entrepreneurship

      • Role of the entrepreneur in contemporary economies: risk and organisation of the other factors of production

  4. 1.4 Resource allocation in different economic systems

    1. 1.4.1Economic system decision-making

      • Decision-making in market, planned and mixed economies

    2. 1.4.2Resource allocation systems

      • Resource allocation in these economic systems

  5. 1.5 Production possibility curves

    1. 1.5.1Production possibility curve

      • Nature and meaning of a production possibility curve (PPC)

    2. 1.5.2PPC shape and opportunity cost

      • Shape of the PPC: constant and increasing opportunity costs

    3. 1.5.3PPC shifts

      • Causes and consequences of shifts in a PPC

    4. 1.5.4Position within a PPC

      • Significance of a position within a PPC

  6. 1.6 Classification of goods and services

    1. 1.6.1Free and private goods

      • Nature and definition of free goods and private goods (economic goods)

    2. 1.6.2Public goods

      • Nature and definition of public goods

    3. 1.6.3Merit goods

      • Nature and definition of merit goods: under-consumption as a result of imperfect information in the market

    4. 1.6.4Demerit goods

      • Nature and definition of demerit goods: over-consumption as a result of imperfect information in the market