ECONOMICS is a social science which deals with human wants and their satisfaction.
It is mainly concerned with the way
in which a society chooses to employ its scarce resources which have alternative uses, for the production of goods for present and future consumption. Economics is the study of how economic agents or societies choose to use scarce productive resources that have alternative uses to satisfy wants which are unlimited and of varying degrees of importance. THEMES OF ECONOMICS Concepts & Economics Systems Scarcity and Choices,& Decision Making Work, Earnings, and Finance Management Business and Entrepreneurship Economic Interdependence Market and the Functions of Governments THREE FUNDAMENTAL ECONOMIC QUESTIONS: 1. What To Produce? capital goods consumer goods The choice of product based on scarcity. 2. How to produce? Decision to how to mix technology and scare resources and production. Partially by man power and machine or fully automated. 3. For whom to produce? The person who actually receives. Who gets maximum satisfaction Who is having the buying power. Efficiency in general describes the extent to which time or effort is well used for the intended task or purpose. It is often used with the specific purpose of relaying the capability of a specific application of effort to produce a specific outcome effectively with a minimum amount or quantity of waste, expense, or unnecessary effort. "Efficiency" has widely varying meanings in different disciplines ECONOMIC EFFICIENCY refers to the use of resources so as to maximize the production of goods and services PRODUCTIVE EFFICIENCY (also known as technical efficiency) occurs when the economy is utilizing all of its resources efficiently, producing most output from least input ALLOCATIVE EFFICIENCY is a theoretical measure of the benefit or utility derived from a proposed or actual selection in the allocation or allotment of resources.
PRODUCTION POSSIBILITY FRONTIER (PPF) is a graph that shows all of the combinations of goods and services that can be produced if all of societys resources are used efficiently.
MICRO ECONOMICS : Meaning : Micro has been derived from GREEK word MIKROSwhich mean small. It is a study of the individual units of economic system. In other words a small part of economy & not the whole economy. DEFINITION: Prof. Mac cannel, micro economics is a study of the specific economic units and a detailed consideration of the behavior of these individual units. Prof.Boulding, micro economics seeks to explain the working of individuals, firms, households, individual prices, wages, particular industries.
MACRO ECONOMICS : MEANING : Macro is been derived from the Greek word MAKROSwhich means LARGE. Macroeconomic is the study of large part of the economy i.E.,The whole economy. The study of economic behaviour of the economy as a whole & not the individual economic units of the economy. DEFINITION : Prof. Boulding, Marco economics deals not only with individual quantities but with the aggregates of these quantities , not with the individual incomes , but with national income , not with individual prices , but with prices level , not with individual outputs but with the national output .
Economic growth is an increase in the total output of the economy. It occurs when a society acquires new resources, or when it learns to produce more using existing resources Stability A condition in which national output is growing steadily with low inflation and full employment of resources. Scarcity: The shortage that exists when less of something is available than is wanted at a zero price Economic good: Any item that is scarce Free good: A good for which there is no scarcity Economic bad: Any item for which we would pay to have less Resources, factors of production, or inputs:Goods used to produce other goods, i.e. land ,labor and capital