Micro Economics ( Introduction)

Date : 8.05.2020 
Sub  : Economics
Day  : 4
Time : 8:20am - 9am
Period : 2
Class    : 11

Learning Objectives

• Meaning of an Economy
• Vital process of an economy
• Why we study economy
• What is Scarcity
• What are Economic Problems

A very good morning students

Thank you for logging in

We now shift our focus to Micro Economics

For today's class i will be introducing you to Micre Economics 

We will be learning the very basics of Economics

Let us begin

ECONOMY: An Economy is a system which provides people , the means to work and earn a living.

You might have seen factories , mines, shops,offices, flyovers,railways, St Columba's school , etc. All these institutions and organisations provide people a means to work and earn an income.Thus these organisations and institutions are a part of an Economy.

VITAL PROCESSES OF AN ECONOMY:

There are 3 vital processes of an economy namely :

• Production : It is the conversion of raw material into finished goods.
• Consumption: It is an act of using up of a resource
• Investment or Capital Formation : The term refers to additions of capital goods, such as equipment, tools, transportation assets, and electricourity.

WHY DO WE STUDY ECONOMICS ?

The main reason for  study of economics can be simplilified to a single word - SCARCITY

SCARCITY : Scarcity refers to the limitation of Supply in relation to Demand for a commodity.

In simple terms we can say a shortage of a resource.

Scarcity of resources calls for Economising of resources.

ECONOMISING OF RESOURCES : Refers to making the best possible use of the available resources

RESOURCE : In economics a resource is defined as a service or other asset used to produce goods and services that meet human needs and wants. ... Classical economics recognizes three categories of resources, also referred to as factors of production: land, labor, and capital.

 ECONOMIC PROBLEMS : Economic Problem is a problem of choice involving satisfaction of unlimited wants out of limited resources having alternative uses

REASONS FOR ECONOMIC PROBLEMS

1. Scarcity of Resources : Resources ( i.e Land , Labour, Capital, etc) are limited in relation to their Demand and economy cannot produce all what people want.There would have been no problem , if resources were not scarce.

2. Unlimited Wants : Human wants are never ending, means their wants can n ever be fully satisfied.If one want is satisfied another want emerges.But human wants do not have the same intensity. If all human wants had been of equal importance , then it would have become impossible to make choices.

3. Alternative Uses: All resources have alternative uses.Meaning different uses.

Petrol is not only used for running vehicles, but also used for running machines, generators, etc.As a result an economy has to make choice between alternative uses of the given resources.

MEANING OF ECONOMICS :

Economics is a social science which studies the way a society chooses to use its scarce or limited resources, which have alternative uses, to produce goods and services and distribute them among different groups of people.

Economics is all about making choices in the presence of Scarcity.

To understand my notes better please go through the video link given below

https://www.youtube.com/watch?v=2aUyKIhcajo

Your assignment is to revise my nots well boys.

Try and write down the definitions given and learn them