TOPIC
Introducing
Economics
John Maynard Keynes came to the modem
definition of economics.
Economics is “a social science concerned with
the proper uses and allocation of resources for
the achievement and maintenance of growth
with stability and with determinants of income
and employment”
,The basic
economic problem
In every country, resources are limited in supply and decisions
have to be made by governments, firms (businesses) and
individuals about how to allocate scarce resources to satisfy
unlimited needs and wants.
This is the basic economic problem that exists in every
economy: how to allocate scarce resources to satisfy unlimited
needs and wants
,Scarcity, choice and
opportunity cost
Th e fundamental economic problem is: ‘scarce
resources in relation to unlimited wants’.
In economics, a need is not the same as a want;
consumer wants are not always satisfied
because of limited income whereas a need tends
to be more important in a scale of priorities.
, The concept of
scarcity and choice
The fundamental problem in economics is that resources are
scarce and wants are unlimited, so there is always a choice
required between competing uses for the resources.
Scarcity: a situation in which wants and needs are in excess of
the resources available.
Wants: needs that are not always realised.
Choice: underpins the concept that resources are scare so
choices have to be made by consumers, firms and
governments.
Resources: inputs available for the production of goods and
services. ( land, labour, capital, enterprise)
An individual, faced with a time
limitations, may have to decide
between going for a walk in the park or
watching a television programme in his
leisure hour. We say that his time is
scarce and he, therefore, needs to
make a choice between going for a
walk or watching television
Introducing
Economics
John Maynard Keynes came to the modem
definition of economics.
Economics is “a social science concerned with
the proper uses and allocation of resources for
the achievement and maintenance of growth
with stability and with determinants of income
and employment”
,The basic
economic problem
In every country, resources are limited in supply and decisions
have to be made by governments, firms (businesses) and
individuals about how to allocate scarce resources to satisfy
unlimited needs and wants.
This is the basic economic problem that exists in every
economy: how to allocate scarce resources to satisfy unlimited
needs and wants
,Scarcity, choice and
opportunity cost
Th e fundamental economic problem is: ‘scarce
resources in relation to unlimited wants’.
In economics, a need is not the same as a want;
consumer wants are not always satisfied
because of limited income whereas a need tends
to be more important in a scale of priorities.
, The concept of
scarcity and choice
The fundamental problem in economics is that resources are
scarce and wants are unlimited, so there is always a choice
required between competing uses for the resources.
Scarcity: a situation in which wants and needs are in excess of
the resources available.
Wants: needs that are not always realised.
Choice: underpins the concept that resources are scare so
choices have to be made by consumers, firms and
governments.
Resources: inputs available for the production of goods and
services. ( land, labour, capital, enterprise)
An individual, faced with a time
limitations, may have to decide
between going for a walk in the park or
watching a television programme in his
leisure hour. We say that his time is
scarce and he, therefore, needs to
make a choice between going for a
walk or watching television
