Economics is the study of goods and services and the production, distribution and consumptions of them. The study of economics looks at behaviour of specific entities and how they interact and work in different economies. There are two distinct ways of studying economics which include, microeconomics and macroeconomics. Microeconomics looks at the behavior of elements in the economy and their interactions. Macroeconomics analyzes the economy as a whole and the issues which affect it. The issues looked at in macroeconomics are unemployment, inflation, economic growth and monetary and fiscal policy.
Production is the process of changing inputs into outputs. These outputs created can be sold for a profit. This uses inputs to create a product or service for exchange or direct use. Production is measured as a rate of output per period of time. Managers will balance production to ensure maximum return through a supply and demand assessment.
Opportunity cost is the cost of production of a specific item. This is the price of when the value of the next best opportunity is lost. Managers of production will make choices between the desirable and mutually exclusive actions in which to take part in. Opportunity costs are not only monetary or financial costs. Opportunity costs can be measured by the real cost of output lost, leisure or anything that provides an alternative benefit to the production.
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