Economics Revision Sheet

1. 📌 Essentials

• Economics studies how scarce resources are allocated to maximize welfare.
• Resources include natural (oil, minerals, water) and human-made (bitcoins, bank accounts).
• Core concepts: scarcity, opportunity cost, trade-offs, incentives, marginal adjustments.
• Microeconomics focuses on individual/firm decision-making; macroeconomics on aggregate activity.
• Decisions to incentives and involve trade-offs.
• Opportunity cost is the value of the next best alternative foregone.
• Scarcity necessitates choices and resource prioritization.
• Marginal analysis examines small incremental changes in decisions.
• Major landmarks: supply and demand, market equilibrium, economic growth, inflation, unemployment.
• Functional relevance: guides policy, business strategy, and personal.

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