Economics
AED 1312 WEEK 1
Contents
Introduction Definition Microeconomics vs Macroeconomics Basic economics concepts Basic economics problems Production possibilities curve
INTRODUCTION
Economics is one of the oldest disciplines among the
humanities and is categorized as a social science. Economics examines and analyses the economic activity of people in order to satisfy their needs and desires. Human wants are the starting point of economic activity and provide the basis for economics. Generally, economics deals with the economic problems of individuals, firms, societies and countries.
DEFINITION
Basically, there are wide definitions of economics as a
social science.
L. Robbins
A science that studies human behavior as a relationship between ends and scarce means which have alternative uses.
K.E. Case and R.C. Fair
A study of how people use their limited resources to try to fulfill unlimited wants and involves alternatives or choices.
MICROECONOMICS
Microeconomics studies individual economic units
in detail such as a household, a firm and a government. As ‘micro’ means looking closer into small units, microeconomics provides an outline for choices and decision making of an individual, a business and the public at large. E.g.
What should I buy with RM5? Where should I go for holiday?
MACROECONOMICS
Macroeconomics studies the aggregate behavior of
the entire economy. It studies the gross domestic product, the national income, inflation, deflation, unemployment, public finance international trade, etc. E.g.
What causes a high inflation? Why did Bank Negara Malaysia cut interest rates by 2%?
POSITIVE ECONOMICS
Positive economics is the branch of economics that
concerns the description and explanation of economic phenomena.
The price of milk has risen from $3 a gallon to $5 a gallon in the past five years.
This is a positive statement because it can be proven true or
Contents
Introduction Definition Microeconomics vs Macroeconomics Basic economics concepts Basic economics problems Production possibilities curve
INTRODUCTION
Economics is one of the oldest disciplines among the
humanities and is categorized as a social science. Economics examines and analyses the economic activity of people in order to satisfy their needs and desires. Human wants are the starting point of economic activity and provide the basis for economics. Generally, economics deals with the economic problems of individuals, firms, societies and countries.
DEFINITION
Basically, there are wide definitions of economics as a
social science.
L. Robbins
A science that studies human behavior as a relationship between ends and scarce means which have alternative uses.
K.E. Case and R.C. Fair
A study of how people use their limited resources to try to fulfill unlimited wants and involves alternatives or choices.
MICROECONOMICS
Microeconomics studies individual economic units
in detail such as a household, a firm and a government. As ‘micro’ means looking closer into small units, microeconomics provides an outline for choices and decision making of an individual, a business and the public at large. E.g.
What should I buy with RM5? Where should I go for holiday?
MACROECONOMICS
Macroeconomics studies the aggregate behavior of
the entire economy. It studies the gross domestic product, the national income, inflation, deflation, unemployment, public finance international trade, etc. E.g.
What causes a high inflation? Why did Bank Negara Malaysia cut interest rates by 2%?
POSITIVE ECONOMICS
Positive economics is the branch of economics that
concerns the description and explanation of economic phenomena.
The price of milk has risen from $3 a gallon to $5 a gallon in the past five years.
This is a positive statement because it can be proven true or