Lecture Element of economics - Chapter 1: Introducing economics. At the end of this lecture, students should be able to: Define economics, identify the sources of economics problems, define opportunity cost, define production and possibility frontier, differentiate between positive and normative economics, differentiate between micro and macro economics, to know the different types of economic systems. | ELEMENT OF ECONOMICS GOHOHO EMMANUEL SENA Introducing Economics Learning Objectives At the end of this lecture, students should be able to Define Economics Identify the Sources of Economics Problems Define Opportunity Cost Define Production and possibility Frontier Differentiate between Positive and normative Economics Differentiate between Micro and Macro Economics To know the different types of Economic Systems Introducing Economics What is economics? According to McConnel and Brue Economics is defined as: The Social Science concerned with the efficient use of limited or scarce resources (and the various uses which compete for these resources) to achieve maximum satisfaction of human material wants. It is a science of making choice WHAT DO ECONOMISTS STUDY? Economic problems production and consumption Scarcity: the central economic problem defining scarcity use of resources (factors of production) labour land and raw materials capital demand and supply importance of reconciling . | ELEMENT OF ECONOMICS GOHOHO EMMANUEL SENA Introducing Economics Learning Objectives At the end of this lecture, students should be able to Define Economics Identify the Sources of Economics Problems Define Opportunity Cost Define Production and possibility Frontier Differentiate between Positive and normative Economics Differentiate between Micro and Macro Economics To know the different types of Economic Systems Introducing Economics What is economics? According to McConnel and Brue Economics is defined as: The Social Science concerned with the efficient use of limited or scarce resources (and the various uses which compete for these resources) to achieve maximum satisfaction of human material wants. It is a science of making choice WHAT DO ECONOMISTS STUDY? Economic problems production and consumption Scarcity: the central economic problem defining scarcity use of resources (factors of production) labour land and raw materials capital demand and supply importance of reconciling demand and supply actual and potential demand and supply 2 WHAT DO ECONOMISTS STUDY? Macroeconomic issues growth unemployment inflation balance of payments problems cyclical fluctuations 3 WHAT DO ECONOMISTS STUDY? Microeconomic issues choices: what, how and for whom the concept of opportunity cost rational economic decision making marginal costs and marginal benefits MC > MB do more MC 3 WHAT DO ECONOMISTS STUDY? The production possibility curve what the curve shows microeconomics and the production possibility curve: choices and opportunity cost increasing opportunity cost macroeconomics and the production possibility curve: production within the curve shifts in the curve 4 The Economic Problem: Scarcity and Choice of 40 Scarcity, Choice, and Opportunity Cost Human wants are unlimited, but resources are not. Three basic questions must be answered in order to understand an economic system: What gets produced? How is it produced? Who gets what is .
