INTRODUCTION TO ECONOMICS
Economics is
one of social science, but unlike other social science such as political
science, sociology, philosophy etc, it has been a difficult task in trying to
give a definite and precise and general acceptable definition on it.
Economics
has a logical structure which tends to build on itself from stage and this has
to do with human behavior, which of curse is based on factual background needed
for application of economic theory to our day to day life.
DEFINITION OF ECONOMICS:
Lord Robbins
defined economics as: “the science which studies human behavior as a
relationship between ends and scare means which have alternative uses.”
Alfred
Marshall defined economics as: “The study of mankind in the everyday business
of life.”
Economics: Is the study of modern economics that
involve modern means of production, such as the application of science and
technology
ECONOMICS AS SCIENCE
Intellectuals have always argued whether economics is a science or not. If it is a science, is it a positive or normative science? Hence the need to understand what science is a systematized body of knowledge confirmable by observations and experimentation. It is a body of generalizations, processing principles, theories or laws which determine a casual relationship between causes and effect. For any discipline to be a science it must have the following attribute.
1. It must be systematized body of knowledge.2. It must possess its own laws or theories
3. These laws or theories can be tested or verified by observation and experimentation.
4. It can make predictions
5. It should be self corrective and
6. It should possess universal validity.
*Since economics posses all these characteristic it can be
concluded that economics is a science.
BASIC TOOLS OF
ECONOMICS ANALYSIS
The
following are some of the basic tools of analyzing economics
WANTS
Wants may be defined as insatiable
desires of human being for the basic necessities of life which include shelter,
good food and fashionable clothing.
SCARCITY
Scarcity may be defined as limited
supply of resources which are required for the satisfaction of human numerous
wants. In this sense, all things are scarce relative to human wants. Human want
are many, but the resources required for producing things to satisfy these
wants are themselves limited (scarce) in supply.
SCALE OF PREFERENCE
This may be defined as a list of
unsatisfied wants arranged in order of preference (desire)
CHOICE
Choice can be defined as a method of
selecting or choosing the alternative to be satisfied out of many human wants.
OPPORTUNITY COST
Opportunity cost means an expression
of cost in terms of forgone alternatives. Opportunity cost can also be defined
as the satisfaction a consumer enjoys by consuming one product at the expense
of the other.
For easy
understanding, anything that is left undone at the expense of other is
opportunity cost. You need to purchase “PASS ECONOMICS WITH EASE” for your
upcoming examination at $50, also you need a pair of sandals cost $50 for your
upcoming event. If, you decided to purchase “PASS ECONOMICS WITH EASE” at the
expense of a pair of sandals. Your opportunity cost is a pair of sandals
WHY DO WE STUDY ECONOMICS? /
IMPORTANCE OF ECONOMICS
1. Economics theories make it possible
to solve most practical problems.2. The study of economics enable a student to understand his economics environment and take decision where it is necessary
3. Rational decision making is possible through the knowledge of economics
4. The study of economics brings about equitable resources allocation, distribution o income and opportunities.
5. The studies of economics enable us to have a direction in the area of production, what to produce and the factors of production to be used.
6. It helps us to have a smooth and a cordial relationship with one another.
7. It helps government to plan towards national integration and economic growth
BRANCHES OF ECONOMICS
1. Micro economics and
2.
Macro economics
Micro economics can be defined as the branch of economics which is concerned
with individual firms, their output and cost, the production and pricing of
simple commodities, wages of individuals etc.
Micro
economics has to do with market activities of individual economic unit in the
economy.
Macro economics can be defined as the branch of economics which consider the
relationship between large aggregates such as the volume of employment, the
total amount of saving and investment etc.
Readers Also Read
Suggested Topic