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Economics studies the allocation of limited resources to meet unlimited wants, focusing on choices made under scarcity. It has two main branches: microeconomics, which examines individual consumers and firms, and macroeconomics, which looks at the economy as a whole. Key concepts include supply and demand, GDP, and various economic systems, with modern economics increasingly addressing globalization and sustainability.

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11 views1 page

Expanded Lecture Note 2

Economics studies the allocation of limited resources to meet unlimited wants, focusing on choices made under scarcity. It has two main branches: microeconomics, which examines individual consumers and firms, and macroeconomics, which looks at the economy as a whole. Key concepts include supply and demand, GDP, and various economic systems, with modern economics increasingly addressing globalization and sustainability.

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© © All Rights Reserved
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Basics of Economics

Economics is the study of how individuals, businesses, and governments allocate

limited resources to satisfy unlimited wants. It examines choices made under scarcity

and the incentives that influence those decisions.

There are two main branches: microeconomics, which looks at individual consumers

and firms, and macroeconomics, which studies the economy as a whole, including

issues like inflation, unemployment, and economic growth.

Key microeconomic concepts include supply and demand, elasticity, consumer choice,

and market structures. These determine how prices are set and how resources are

distributed.

Macroeconomic concepts include GDP, monetary and fiscal policy, interest rates, and

international trade. Governments use policy tools to stabilize the economy and promote

growth.

Economic systems vary from market economies (like capitalism) to command

economies (like socialism), with mixed economies being the most common.

Economists use models and data to make forecasts and test theories. Tools such as

cost-benefit analysis and marginal analysis help in making rational economic decisions.

Globalization, technological change, and environmental sustainability are increasingly

important areas of focus in modern economics.

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