Chapter 1- Introduction - Introducing Introducing Economics...

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Introducing Introducing Economics Economics
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Introducing Economics In this subject you will develop an understanding of what the subject of economics is all about Studying economics gives you a way of thinking about the world . It helps you to make sense of the decisions people are making all the time : decision we make about what to buy or what job to do , decision our GOV makes about how much to tax us or what to spend those taxes on. You will be able to apply this way of thinking to your daily life
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Economics is traditionally divided into 2 main branches Microeconomics is concern with the individual parts of the economy . Its concerned with the demand and supply of particular goods, services and resources (firm behaviour, consumer behaviour) Macroeconomics is concerned with the economy as whole , its concern with aggregate demand (the total amount of spending in the economy) and aggregate supply ( the total national output of goods and services) (overall behaviour of the economy)
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What do Economists Study? Economic problems production and consumption Human wants are virtually unlimited , whereas the resources available to satisfy these wants are limited we can thus define scarcity as follow : Scarcity: the central economic problem defining scarcity (is the exceed of human wants over what can actually be produced. Because of scarcity, various choices have to be made b/w alternatives ) use of resources the world only has limited amount of resources these resources or factors of production as they are often called are of 3 broad types : labour land and raw materials capital
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What do Economists Study? Macroeconomic issues Economic growth (difference between the GDP across the years) unemployment Inflation (continuous rise in prices ) balance of payments (export – import) problems
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What do Economists Study?
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