INTRODUCTION AND OVERVIEW OF MICROECONOMICS.pptx

Introduction to Economics

1. Basic Microeconomics

2. ECONOMICS

3. ECONOMICS Is the scientific study of how individuals, organization or societies deal with the problem of scarcity .

4. SCIENTIFIC STUDY ASSUMPTIONS: Ceteris Paribus Rationality CONCLUSIONS: Positive Economics Normative Economics 01

5. INDIVIDUALS, ORGANIZATIONS, OR SOCIETIES MICROECONOMICS Individuals/Households Organizations/Businesses MACROECONOMICS Societies 02

6. DEAL WITH (MAKING DECISIONS) 3 ECONOMIC QUESTIONS: What? How? Who? 03

7. PROBLEM OF SCARCITY Refers to the basic economic problem that arise because individuals have unlimited wants but the resources are limited . It compels individuals and societies to make decisions on how to allocate their resources effectively. 04

8. BENEFITS AND COSTS IN ECONOMICS

9. BENEFITS Something positive or valuable that is obtained, received or gained.

10. COSTS Anything that is given up, lost or sacrificed in trying to gain some benefits.

11. BASIC FORMULA IN ECONOMICS NET BENEFIT = Benefits - Costs

12. MICROECONOMICS

13. MICROECONOMICS Is the scientific study of how individuals and organizations deal with the problem of scarcity.

14. INDIVIDUALS/ HOUSEHOLDS (CONSUMERS) Their goal is to maximize the utility.

15. ORGANIZATIONS/ FIRMS (PRODUCERS) Their goal is to maximize the profit. Profit =Total Revenue – Total Cost