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Supplementary Notes of Topic 1

This document discusses the scope of economic analysis and introduces some key economic concepts. It addresses three fundamental economic questions: what goods and services to produce, how to produce them, and who will consume them. These questions arise due to scarcity of resources relative to unlimited human wants. The document also defines important economic terms like benefit, cost, and opportunity cost.

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Lap Sang Ho
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44 views2 pages

Supplementary Notes of Topic 1

This document discusses the scope of economic analysis and introduces some key economic concepts. It addresses three fundamental economic questions: what goods and services to produce, how to produce them, and who will consume them. These questions arise due to scarcity of resources relative to unlimited human wants. The document also defines important economic terms like benefit, cost, and opportunity cost.

Uploaded by

Lap Sang Ho
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Supplementary Notes of Topic 1: The Scope of Economic Analysis

All economic problems and questions arises because of ________________________


- Scarcity is the condition that arises because resources are ___________________ relative to
____________________ human wants.

Three Economic Questions:


Based on the characteristics of available resources, what goods and
- Choices of services should be produced?
products & - To offer more AD places or HD places by HKCC?
services - To build up more residential buildings or commercial buildings?
How the goods and services be produced with various production
- Choices of methods?
production - by recruiting more labor?
methods - by using more machine?
Distribution methods for the final goods and services
- Choices of Who are the buyers / users / targeted receivers, it is determined by
buyers / users various distribution criteria:
- by market price, e.g. who have enough money to buy it?
- by how lucky you are, e.g. the lucky numbers in the Home
Ownership Scheme.
- by the characteristics you have, e.g. who know Putonghua can
understand radio programme spoken in Putonghua

Examples
“What”, “how” and “for whom” questions?

“……The Director of Kowloon College announced to launch a new Degree program


rather than a new AD program……”
“……The Director of Kowloon College announced that an on-line program would be
launched……”
“……The Director of Kowloon College announced that a program would be
launched for those AD/HD degree holders…”

Economic way of thinking


- Benefit is the gain or pleasure that something brings. In Economics, benefit is measured by
“what you are ___________________ to give up”.
- In Economics, costs are in terms of the concept of “opportunity cost” which is “the best
thing that you ____________________ give up to get something”—
 By definition, the highest-valued option forgone for an act or a decision.
 By calculation, the total opportunity cost can be the sum of________________ and
_______________________.
Additional PPT related to “Marginal Benefit”

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