Introduction to Economics
📰 Glossary
Factors Underlying Decisions
The Business Cycle
What is Economics?
Study of production, exchange and distribution of G&S to solve the economic problem,
trying to allocate Scarce Resources to satisfy society’s Unlimited human Needs and Wants
for Goods and Services
An economy is a system that seeks to answer the economic problem, an organisational
structure. A system which tries to balance the available resources of a country (natural
resource (land), labour, capital and enterprise) against the wants and needs of consumers
Economics is about the distribution, exchange and production of goods and services in an
economic system
An exchange of money (or other goods) for a good, service or information is considered
an economic transaction
Introduction to Economics 1
, The key issue is scarcity. It is only when things are ‘scarce’ that we have to arrange a
system (an economic system) to handle its production, distribution and exchange
The economic problem of limited resources versus unlimited human wants
SOCIAL: Economics is the specific study of human behaviour in the making and
exchanging of goods and services
SCIENCE: Economics seeks to model and understand the forces in play to make meaningful
predictions
Y=C+S
MACROECONOMICS: Looks at an economy as a whole - and impacts as a whole of changes
to all things that affect Demand - i.e. output, employment, taxation etc. Macroeconomic changes
affect Demand for goods and services
MICROECONOMICS: Looks at single sectors in the economy - and the impact of changes in
single industries, sections of the labour market, etc. on firms’ supplies to markets.
Microeconomics changes affect Supply of goods and services
GOODS: Physically tangible objects that can be used to satisfy wants, e.g. food, shoes, cars,
houses, books and furniture
Goods can be divided into Consumer and Capital goods
Complementary Goods: Two products generally consumed together. When we buy a car
we also need to buy petrol
Substitutes: Products that can be consumed as alternatives to each other, e.g. butter or
margarine
SERVICES: Physically intangible actions that can be performed to satisfy economic wants;
medical care, dental care, haircuts, education, police protection, fire protection and national
defence
Classification of Needs and Wants
Introduction to Economics 2
📰 Glossary
Factors Underlying Decisions
The Business Cycle
What is Economics?
Study of production, exchange and distribution of G&S to solve the economic problem,
trying to allocate Scarce Resources to satisfy society’s Unlimited human Needs and Wants
for Goods and Services
An economy is a system that seeks to answer the economic problem, an organisational
structure. A system which tries to balance the available resources of a country (natural
resource (land), labour, capital and enterprise) against the wants and needs of consumers
Economics is about the distribution, exchange and production of goods and services in an
economic system
An exchange of money (or other goods) for a good, service or information is considered
an economic transaction
Introduction to Economics 1
, The key issue is scarcity. It is only when things are ‘scarce’ that we have to arrange a
system (an economic system) to handle its production, distribution and exchange
The economic problem of limited resources versus unlimited human wants
SOCIAL: Economics is the specific study of human behaviour in the making and
exchanging of goods and services
SCIENCE: Economics seeks to model and understand the forces in play to make meaningful
predictions
Y=C+S
MACROECONOMICS: Looks at an economy as a whole - and impacts as a whole of changes
to all things that affect Demand - i.e. output, employment, taxation etc. Macroeconomic changes
affect Demand for goods and services
MICROECONOMICS: Looks at single sectors in the economy - and the impact of changes in
single industries, sections of the labour market, etc. on firms’ supplies to markets.
Microeconomics changes affect Supply of goods and services
GOODS: Physically tangible objects that can be used to satisfy wants, e.g. food, shoes, cars,
houses, books and furniture
Goods can be divided into Consumer and Capital goods
Complementary Goods: Two products generally consumed together. When we buy a car
we also need to buy petrol
Substitutes: Products that can be consumed as alternatives to each other, e.g. butter or
margarine
SERVICES: Physically intangible actions that can be performed to satisfy economic wants;
medical care, dental care, haircuts, education, police protection, fire protection and national
defence
Classification of Needs and Wants
Introduction to Economics 2
