01 Economics and Its Importance

8/16/2019 01 Economics and Its Importance

http://slidepdf.com/reader/full/01-economics-and-its-importance 1/22

ECONOMICS AND ITS

IMPORTANCESummer 2016

10-May-2016



Economics is a social science concwith the efcient allocaand utilization o scarce

resources or the satiso he society’s unlimiteand needs.



Economists • how people make decisions; how

work, what they purchase, how m

save out o their income and how

their savings

• how people interact with one ano

• analyze orces and trends that a

whole country



DIVISIONS

OF ECONOMICS



Micro- economics

branch o economics that ethe unctioning o the indivindustries and the behavio

individual decisionmakingi.e. business "rms and hou



Macro- economics

branch o economics thatexamines the economic bo aggregate economic v

i.e. income, output, emplinvestment, and general prices



BRANCHES

OF ECONOMICS



Positive Economics

• seeks to understand the

behavior and the opera

the economic system w

making #udgments abou

whether the outcomes a

or bad

• describes what exists a

it works $ypes%

1. Descriptive Economics is theand presentation o data that dphenomena and acts.

2. Economic Theory is a statem

or sets o related statements a



Normative Economics

• looks at the outcomes o ec

behavior and asks i they ar

bad, whether they can be m

better• involves #udgments and pre

or causes o action



METHODOLOGY

OF ECONOMICS



EconomicTheory

• attempts at "nding explanations

observed economic phenomena

establish cause and eect relatio

! why a person makes certain econ

decisions! why a particular outcome is reali



Economic Model

• ormal statement o an economic

which is usually a mathematical

o a presumed relationship betwe

more variables

• &ommonly expressed in words, ge'uations

! (aw o )emand and *upply



FOUNDATIONS

OF ECONOMICS



UnlimitedWants

• the desire o consumers t

satisaction rom the vari

goods and services they

! necessities to luxuries• individuals and institution

enumerable un"lled want



Scarce Resources

• +ll natural, human, and

manuactured resource

into production and serv

! actory, e'uipment, tomachinery, transportatcommunication, acilitiland, and mineral resou



CATEGORIES of

ECONOMIC RESOURCES



Land(arable land, forests,

mineral and oil deposits,water resources, etc.)

• -ncludes all natural reso

i.e., all gits o nature us

the production process



Labor(teachers, engineers,

factory workers, physicians, professional athletes, etc.)

• eer to all the physical and

talents o individuals availab

usable in producing goods an



Capital(tools, machinery, equipment, etc.)

• -ncludes all produced go

used again to produce

consumer goods and se



Entrepreneur • +n individual who comb

land, capital, and labor

produce goods or servic



QUIZ

TOMORROW12May2016

--end of presentati

01 Economics and Its Importance

Documents

Transcript of 01 Economics and Its Importance