My Note - Definition of Economics 1 Alfred Marshalla famous...

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Definition of Economics 1. Alfred Marshall—a famous British company founder born in 1800, bringing significant contribution of Microeconomics. The study of mankind in the ordinary business of life 2. Milton Friedman—retired American professor of University of Chicago who mainly debated monetary policies. How a particular society solves its economic problems 3. Lionel Robbins A science that studies human behaviors as a relationship between ends/scarce means which have alternative uses 4. David Simon Mbianda’s Theory A social science that attempts to use (cope with) its scarce resources to attain a maximum fulfillment of men’s unlimited wants All economics problem arises from a single and inescapable fact of life. Scarcity will exist forever like the existence of gravity which pulls things onto the earth. What is Scarcity? A situation whereby our unlimited wants cannot be satisfied by limited resources. Resources for doing economics are from the factor of production—limited in supply Land: countable land in the earth even though many of the lands are abandoned Japan built an airport in the middle of the sea which costs a huge amount of money. It implies that artificial land has a physical limitation. Capital: man-made resources from land and labor; therefore also is limited Labor: although there are many people in the world, we can’t instantly add 10 billion to the population in one or two days. Entrepreneurship: this kind of people is willing to bear risk and has other skills that mediocre people don’t have, so they are limited. Besides, they control and organize the use of land, capital, labor, and maybe knowledge. Knowledge (from business) Free goods are God-given gifts of nature such as water in the middle of the oceans. Economic goods are good that are produced with the factors of production. Dynamic analysis is done on a time period basis. E.g. Income statement for the year ended Dec 31 2003 Static analysis is done on a snap shot basis. E.g. Balance sheet as of/ at Dec 31 2003 Whether a good is scarce or not depends on the demand of the good. e.g. A bakery provides 5 bread every day, today only 4 Will it certainly be scarce today? No, because we don’t know how many demand for the bread. It may be only 3 breads. Dependent: 0-18 yrs and 65+ are non-productive and non-reproductive.
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Independent: 19-65 yrs are productive and reproductive. Dependency ratio= If this ratio is ↑ there will be high pressure to working group to the resources What is Choice? The act of selection among restricted alternatives Must be a cost to you What is Opportunity Cost? David Simon’s definition: The highest forgone alternative. Japanese Instructor: The amount of other products which must be forgone or sacrificed to produce a unit of product.
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My Note - Definition of Economics 1 Alfred Marshalla famous...

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