Introduction to Economics

Factors of Production

Four Factors of Production

The best way to introduce economics is by introducing the basic economic problem of scarcity. Since there are limited resources to produce goods, and there are unlimited human wants, we face a decision over the efficient allocation of these scarce resources or factors of production. When we choose how we allocate these factors of production, we have...
Production Possibilites Curve

Production Possibilities Frontier

The best way to show a country's available resources and the maximum two goods produced from those resources is a Production Possibilities Frontier (PPF) or Production Possibilities Curve (PPC). One of the first things to note is that, often Economists make assumptions in models; such as "ceteris paribus" meaning all else remains the same or...
economic Growth And Development

Economic Growth And Development

What is the difference between Economic Growth and Development? We will start by defining Economic growth and development. It is possible to have economic growth without economic development. Economic growth in an economy is by an outward shift in its Production Possibility Curve (PPC). Another way to define growth is the increase in a country's total...
Types of Economies

The Four Types of Economies

The way scarce resources get distributed within an economy determines the type of economic system. There are four different types of economic systems; traditional economy, market economy, command economy and mixed economy. Each type of economy has it's own strengths and weaknesses. Four Types of Economies 1. Traditional Economic System The traditional economic system is the...

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