Lecture_1 - LECTURE 1 WHAT IS ECONOMICS? Definition of...

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LECTURE 1 WHAT IS ECONOMICS?
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Definition of Economics The society has limited resources and hence cannot produce all goods and services that people wants Our inability to satisfy all our wants is called scarcity . A household and an economy face many questions: Who will work? What goods should be produced and how much should they be produced? For whom they are produced? And at what price should they be sold? Because we face scarcity, we must make choices . The choices we make depend on the incentives we face. An incentive is a reward that encourages a choice or a penalty that discourages a choice.
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Definition of Economics Economics is the study of how society manages its scare resources, i.e. a social science that studies ―choices‖ that people make to cope with their ―scarcity‖ and ―incentives‖ that influence those ―choices‖. Economics divides in to main parts: Microeconomics Macroeconomics
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Definition of Economics Microeconomics Microeconomics is the study of choices that individuals and businesses make, the way those choices interact in markets, and the influence of governments. Macroeconomics Macroeconomics is the study of the performance of the national and global economies.
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Two big questions summarize the scope of economics: How do choices end up determining what , how , and for whom goods and services get produced? When do choices made in the pursuit of
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Lecture_1 - LECTURE 1 WHAT IS ECONOMICS? Definition of...

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