ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Economic decisions involve production, distribution, exchange, consumption, saving, and investment of economic resources. Private and Public Goals. Economic decisions are made to serve the goals of individuals and private organizations (private goals) and society as a whole (public goals).

Detailed explanation-2: -A simple example of an individual economic decision is the purchase of a gadget at a certain price. This individual will have to think if it is worth allocating his resource-money, to buying a gadget. A family economic decision is almost similar although this time, it involves several individuals.

Detailed explanation-3: -Opportunity cost is the value or benefit of an alternative choice compared to the value of what is chosen. The concept of opportunity cost is used in decision-making to help individuals and organizations make better choices, primarily by considering the alternatives.

Detailed explanation-4: -Using good economic reasoning (like a decision-making model) can help avoid unintended yet predictable consequences. The more students practice the decision-making skill, the greater likelihood it becomes intuitive and they will make more informed decisions or be able to better analyze decisions made by others.