Professional Documents
Culture Documents
Prof. R. B. Deri
ECONOMICS,
DEFINED
ECONOMICS is a social
science that deals with the
proper allocation of scarce or
limited resources to satisfy
unlimited human wants and
needs.
MAIN DIVISIONS OF
ECONOMICS
MACROECONOMICS
deals with the aggregate economic
activity of a nation, usually larger in
scope. Macroeconomics analyzes the
entire economy and issues affecting
it, including unemployment,
inflation, economic growth, and
monetary and fiscal policy.
MICROECONOMICS
Is a branch of economics that deals
with how an individual, household,
or firm properly allocates scarce or
limited resources to satisfy their
unlimited wants and needs.
MACROECONOMICS
Is the branch of economics that
deals with how the nation properly
allocates scarce or limited resources
to satisfy the unlimited human wants
and needs of its people.
ECONOMIC ANALYSIS
Economic analysis may be applied
throughout society, as in business,
finance, health care, and government, but
also to such diverse subjects as crime,
education, the family, law, politics,
religion, social institutions, war, and
science.
TYPES OF ECONOMIC
ANALYSIS
Is an economic
Positive Economics
analysis that
analyses an
economic
behavior or
economic
situation by
describing "what
is?.
Normative Economics
Is an economic
analysis that analyses
an economic behavior
or economic situation
by advocating "what
ought to be or what
should be.
TYPES OF ECONOMIC
SYSTEM
(a) Traditional;
(b) Command;
(c) Market;
(d) Mixed
(Market economy is an economy that allocates resources through the
decentralized decisions of many firm and households as they interact in
markets for goods and services.)
(Property right is the ability of an individual to own and exercise control
over scarce resources.)
(Market Failure is a situation in which a market left on its own fails to
allocate resources efficiently.)
(Market power is the ability of a single economic actor (or a small group of
actors) to have a substantial influence on market prices.)
BASIC ECONOMIC
PROBLEMS
(a) what to produce?;
(b) how to produce?;
(c) how much to produce?; and
(d) for whom goods will be produced?
FACTORS OF
PRODUCTION OR
ECONOMIC
RESOURCES
(a) Land pertains to natural
resources as source of raw
TEN PRINCIPLES OF
ECONOMICS
TERMINOLOGIES
Externality is the impact of one persons action to
the well-being of a bystander.
Efficiency is the property of society getting the most
it can from its scarce resource.
Equality is the property of distributing economic
prosperity uniformly among the members of society.
Productivity is the quantity of goods and services
produced from each unit of labor input.
Inflation is an increase in the overall level of prices in
the economy.
Business cycle is the fluctuation in the economic