JC Economics Tuition Notes
Introduction to Economics
Content of teaching for Chapter 1
What is Economics?
Economics is the social science which involves the study of economic activities conducted by economic entities in an economy and between economies. It also involves the explanation on monetized activities by human beings and how they will conduct these activities to maximize their gains based the interest of an individual, firm, society and the country.
The focus of the study of Economics is to explain how the various economic entities will attempt to maximise their gain or welfare with the limited resources they have in the economic activities conducted by them. This can be explained by the various economics principles that will depict how the economic entities will conduct their economic activities to solve the problem of scarcity where limited resource is unable to meet the unlimited wants of the society.
[read more=”+ Read More” less=”– Read less”]The study of Economics can be examined by the notion of normative economics and positive economics. As the study of economics based on the real and empirical economic activities requires yardstick for evaluation and comparison, there is the need of application of value judgement which is what normative economics means.
For example, the real data show that the economy has 45% of the population in the middle income group which is based on real or positive economics but this must be measured by normative economics which will have a yardstick that state that 60% of the population should be in the middle income group.
The study of Economics is divided into different aspects which can be classified as Microeconomics and Macroeconomics. Microeconomics studies the economic behaviours and activities of economic entities like the individuals, the firm and the industry, the society as a whole and the government. For macroeconomics, it involves the study of the economic activities that are conducted within an economic entity (by a country) and the economic activities that the economic entity conducts with other countries.
Principles of Economics
Principles of Economics are founded on the basis of social science where they can be used to explain how the various economic entities will conduct their economic activities. They are used to explain how the economic entities will attain their maximization and reach the equilibrium level for a particular market or the economy. The notion of maximization for the individuals, the firms, the society and the countries will guide economic activities to attain an equilibrium level of consumption and production that satisfy the interests of all economic entities at different markets and economic system.
Why Study Economics?
The study of Economics is significant for the development of human civilization as it deals with the problem of scarcity where scarce resources can be better utilized to resolve the economic reality of unlimited wants.
The study of Economics will help the economic entities make better decision-making in the way that they utilize resources to maximize the welfare they will gain from their economic activities in a process, known as resource allocation.
At the individual level, it will help to explain how individuals gain the maximum level of satisfaction from their consumption activities and how they buy based on the factors that will affect their consumption behaviours.
For the society, it will help to show how the society allocates the limited resources to maximize the interests of the society as a whole through the concept of cost and benefit analysis.
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More Microeconomics Notes
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