Download Economics 101: Understanding Scarcity, Choices, and Goods & Services and more Essays (high school) Economics in PDF only on Docsity! Introduction to economics 1_The meaning of economics what is the economics “Economics is a social science that studies how society chooses to allocate its scarce resources, which have alternative uses , to provide goods and services for present and future consumption “ . Goods and services :What exactly are goods and services ? Good= anything that satisfies a wants(physical product) Examples: cars / laptops/ phones Service = anything that satisfies a wants(Non physical product) Examples: medical services / Bank / teaching »both goods and services satisfy wants and therefore can be called goods the purpose of production: to provide goods that satisfy wants 1.2 Resources Resources= inputs , factors (land, capital, entrepreneurship...), means of production land = natural resources Labor = human resources Capital= man made! It is a good that has been produced for use in production of other goods .Goods are produced for on of two purposes » satisfying consumer’s wants (consumed by individuals, household)= consumer goods » using in the production of other goods (consumed by firms ) = capital goods Some goods may be a consumer good in one use and a capital in other use To tell whether it is a consumer bit capital good , ask a question: . is the good going to be consumed directly or will it be used to produce more goods Entreprancurship=human efforts! Entrepreneurs are the risk takers They are more than managers, although they use managerial abilities They reap the profits and bear the losses of their undertakings Entrepreneurship in the organizational force that combimes the all means of production 1.3 _scarcity Scarcity relationship between how much there is of something and how of it is wanted , it doesn’t mean that it’s “rarely found in nature As soon as someone is willing to pay for a good or resource it's scarce by definition for an economist What if not scarcity did not exist :all goods will be free goods Resources are limited but human wants are unlimited 1.4_Choices Choice is another core economic concept Since people do not have infinite incomes , they make choices whenever the purchase goods and services They have to make decide how to allocate their limited financial resources and so always need to chose between 1.5 opportunity cost You can know all that if you read this article hitps://www.imf.org/external/pubs/ft/fandd/basics/bigs mall.htm Positive and Normative Economics Economics is a science as wellas art , but which type of science is big question . Positive economics is related to the analysis which is limited to cause and effect relationship . On the other hand , Normative economics aims at examining real economic event from the moral and ethical point of view . It is used to judge whether the economic events are desirable or not While Positive economics is based on facts about the economy. Normative economics is value judgment based. Most of the people think that the statements which are commonly accepted are a fact but in reality, they are valued. By, understanding the difference between positive and normative economics, you will learn about how the economy operates and to which extent the policy makers are taking correct decisions.
