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WHAT WILL WE LEARN?
WHAT WILL WE LEARN?
Definition Of Economics & Microeconomics
Comparison: Micro & Macro
Economic Resources
3 Economic Problems
Production Possibility Curve (PPC)
Basic Economic Problems
World Economic Systems
The students should be able to:
The students should be able to:
Define microeconomics
Distinguish between micro and macro
Identify the concept of economic problems
Describe the basic economic problem
“Economics is the study of nation’s accumulation of wealth”
“Economics is the study of nation’s accumulation of wealth”
-Adam Smith-
-Adam Smith-
“Economics is a study of how people use their limited resources to try to fulfill unlimited wants and involves alternatives or choices”
“Economics is a study of how people use their limited resources to try to fulfill unlimited wants and involves alternatives or choices”
-K.E. Case & R.C Fair-
-K.E. Case & R.C Fair-
“Economics as a field of social science that studies the management of limited production resources, determinants of national income and efficiency”
“Economics as a field of social science that studies the management of limited production resources, determinants of national income and efficiency”
-Keynes-
-Keynes-
SCOPES OF ECONOMICS
SCOPES OF ECONOMICS
Video - Micro vs Macro
Video - Micro vs Macro
THREE BASIC ECONOMIC PROBLEMS
THREE BASIC ECONOMIC PROBLEMS
eCONOMIC RESOURCES
eCONOMIC RESOURCES
Economic resources - Land
Economic resources - Land
Economic resources - Labour
Economic resources - Labour
Economic resources - Capital
Economic resources - Capital
Economic resources - entrepreneur
Economic resources - entrepreneur
CONCEPTS OF ECONOMIC PROBLEMS
CONCEPTS OF ECONOMIC PROBLEMS
This economics concept is simple :
This economics concept is simple :
Because the resources are scarce, therefore choices have to be made. Once choices are made, there will be an opportunity cost as the value of the next-best choice (alternative) available.
•What is the opportunity cost by choosing to study at university???
PRODUCTION POSSIBILITIES CURVE
PRODUCTION POSSIBILITIES CURVE
PPC is used to explain problems of scarcity, choice and opportunity cost faced by nation.
PPC shows the various possible combinations of goods and services produced within a specified time with all resources (labor, land & capital) fully and efficiently employed.
PPC is the graph that shows the maximum limits at which a country can simultaneously produce 2 goods.
ASSUMPTION OF PPC
ASSUMPTION OF PPC
The economy only produces two goods.
The economy is operating in full employment and full production capacity (full efficiency).
The level of technology is fixed and unchanging.
Economic resources are fixed in quantity and quality.
BASIC ECONOMIC PROBLEMS
BASIC ECONOMIC PROBLEMS
economic system - capitalism
economic system - capitalism
economic system - socialism
economic system - socialism
economic system - mixed economy
economic system - mixed economy
Content Summary
Content Summary
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