Introduction to economics the supply and demand

Introduction to economis

1. Basic Microeconomics Theory Econ 101 Introduction to Economic Theory Basic Concepts in Economics Overview of the Economy Types of Economic System

2. Basic Concept in Economics Economics It’s the study of scarcity , the study of how people use resources, or the study of decision-making. Types of scarcity Absolute scarcity Relative scarcity

3. Basic Concept in Economics Economics 'Oikos' meaning "House & 'Nomos' meaning "Law“. “ The Art Of Household Management ” Economic good, Economic bad & Free good

4. Basic Concept in Economics Economic good - goods and services Free good - a good for which there is no scarcity Economic bad - any item for which we would pay to have less

5. Basic Concept in Economics How is economics existing in our everyday life? we make choices based on goods which give the highest satisfaction opportunity cost - the highest-value alternative that must be forgone when a choice is made.

6. Basic Concept in Economics Needs Vs. Wants

7. Basic Concept in Economics Needs Vs. Wants Unlimited Complementary Recurring Gradable Variable Competitive

8. Overview of the Economy POSITIVE ECONOMICS NORMATIVE ECONOMICS statements of fact & logical deductions objective statements  c onnects cause and effects Statements about what should be done value judgement Make recommendation

9. Overview of the Economy Scientific Method A manner of analyzing issues that involves five steps: Figure 1.1 Scientific Method

10. Overview of the Economy Assumptions - statements accepted as true without proof Economic Model , simplified versions of reality used to analyze real-world economic situations.

11. Overview of the Economy Ceteris Paribus assumption - Laws and hypotheses of economics are always stated with the qualifying phrase:  “other things being equal” “everything else held constant”

12. Overview of the Economy Macroeconomics Microeconomics Focuses on issues that affect the economy as a whole Focuses on issues that affect individuals and companies

13. Basic Economic Problem Limited Resources Overview of the Economy Choice & Opportunity Cost What to produce & what quantities ? For whom is the goods produced? How efficiently are the resources being utilized? How to produce these goods?

14. 1. Economic Freedom Economic Goals Overview of the Economy 2. Economic Equity 3. Economic Efficiency 4. Economic Security 5. Economic Stability 6. Economic Growth

15. An economy , or economic system , is the way a nation makes economic choices about how the nation will use its resource s to produce and distribute goods and services. Economic System

16. 4 Types of Economic System Pure Market Economy - deals with economic problems by conosidering consumer’s choices Pure Command Economy - dictated by the gov’t thru the head of the nation Economic System

17. 4 Types of Economic System 3. Traditional Economy - production decisions are made according to customs and traditions 4. Mixed Economy - a mixture of the the three forms of economic systems Economic System

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