(a) State Professor Robbins’ definition of Economics. (b) Explain the following concepts: (i) opportunity cost; (ii) scale of preference; (iii) production p...

(a) Robbins' definition. Professor Lionel Robbins defined Economics as "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." It stresses scarcity and choice.

(b) Concepts:

• (i) Opportunity cost. This is the real cost of a choice measured as the next best alternative that is given up (forgone) in order to have it. For example, if a farmer uses his land to grow maize instead of yam, the opportunity cost of the maize is the yam forgone.
• (ii) Scale of preference. This is a list of an individual's wants arranged in order of importance, with the most pressing want placed first. It guides choice because limited resources are used to satisfy the most urgent wants before the less urgent ones.
• (iii) Production possibility curve (PPC). This is a curve that shows the various combinations of two goods that a country can produce when its resources are fully and efficiently employed. Points on the curve show efficient production, points inside show under-utilisation of resources, and points outside are unattainable with current resources. Its downward slope illustrates opportunity cost, because producing more of one good means producing less of the other.

(c) Three reasons for studying Economics:

1. It helps individuals to make rational choices in using their scarce resources.
2. It provides knowledge and skills for careers and for managing personal and business finances.
3. It helps citizens understand and evaluate government economic policies and national issues such as inflation and unemployment.