(a) Micro economics (b) Macro economics
Micro economics studies the behaviour of individual economic units. Macro economics studies the behaviour of the economy as a whole.
Economy is an Economic Organisation which provides sources to earn livelihood.
Economic problem is the problem of allocation of limited resources available in the economy.
Cause of economic problems are :
(a) Unlimited Human Wants (b) Limited Economic Resources
Alternative uses of Resources.
Central Problems of an Economy
What to produce? How to produce? For whom to produce?
For the selection of an opportunity, the sacrifice of next best alternative use is called opportunity cost.
Production possibility frontier (PPF) shows different combinations of a set of two goods which can be produced with given resources and available technology.