y=c+g+i+x, y=c+m+s+t

imports, savings, tax

Exports, Government expenditure, Investments

GDP

situation where all other factors remain unchanged

Normative approach

Positive

the next best alternative

satisfaction/utility

profits

Total revenue - Total costs

why people make economically irrational decisions

Heuristics

Land, Labour, Enetrprise, Capital goods

Rent, Wages, Profit, Interest

goods used to make consumer goods

goods which satisfy needs/wants

products that last a long time

products which are used up in the act of consumption

a service that’s provided for you like a haircut

goods that have zero opportunity cost

satisfaction of citizens

scarcity

because they want to maximise utility and spend the least possible

product possibility frontier

the maximum output of two goods