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Introtoeconomics-Lecture 01

Economics is the study of the allocation of resources among alternative uses to attain desired ends. It is a branch of social science which deals with the study on attaining human wants and needs.

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52 views

Introtoeconomics-Lecture 01

Economics is the study of the allocation of resources among alternative uses to attain desired ends. It is a branch of social science which deals with the study on attaining human wants and needs.

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api-247714257
Copyright
© © All Rights Reserved
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Introduction to

ECONOMICS

Prepared by: Engr . Saeed A Metlo

What is Economics?
the branch of knowledge concerned with

the production, consumption, and transfer


of wealth.
Economics is the study of the allocation of
resources among alternative uses to attain
desired ends.
It is a branch of social science which deals
with the study on attaining human wants
and needs.

Divisions of Economics
Macro Economics

The study of economics as a whole.


It is concerned with issues and problems
concerning the overall economy of a nation or
the world.
MacroeconomicsStudy of the large economy as a wholeor in its
basic subdivisions (National Economic Growth,
Government Spending, Inflation,
Unemployment, etc.)

Divisions of Economics
Micro Economics

The study of individual parts of the economy.


It is concerned with issues and problems
facing the individual components of the
economy (supply, prices of goods etc..).
MicroeconomicsStudy of small economic units such as
individuals, firms, and industries (competitive
markets, labor markets, personal decision
making, etc.)

Divisions of Economics
Prices of
Goods

Supply

Demand

Alternate
Goods

Needs and Wants


Needs
Needs what people must have to live.
Food
Clothing
Shelter

These are goods and services that people


needs in order to live.
Without these things, people cannot survive.

Needs and Wants


Wants
These are goods and services that
makes the lives of people easier and
comfortable.

Wants the things we would like to


have, but can live without.

People can do away with wants, but it


makes their lives more meaningful.

Points to Remember
Wants and Needs

vary from one person to

another.

Example: To an office worker, a cellphone is


considered as a need but to a farmer it is a
want.

Wants and needs

are never satisfied.

Example: Cellphone models changes as time


goes by. It may be in today but will become
obsolete in the future.

Economic decision

We have unlimited wants and wish to


satisfy those wants with available
resources, we have to make choices.
Economic choice involves the
attainment of desired ends through the
allocation of these scarce resources
among alternative uses.

Factors that affect Economic


Decisions
Desired ends whatever goal or
objective is identified as urgent.
Allocation distributing resources so that
the desired ends are satisfied, partially
satisfied or not satisfied at all
Alternative uses refers to the many
different choices which are equally
appealing

Scarcity
Scarcity exists when the

resources of the economy are not


enough to meet the wants or
needs of people or the society.

Types of Scarcity
Physical Scarcity

when resources
needed to satisfy wants and needs are not
available
Psychological Scarcity when resources
are available but cannot be used by the
person or entity to satisfy their wants or
needs

Points to Remember
To attain wants and needs, people

must make use of wise economic


decisions to prevent scarcity. This
can only be achieved by a
comprehensive understanding of the
basic principles of economics.

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