Course Title: English and Economics

Course Code: Hum 1103

Course Teacher: Mamunur Rashid

Lecturer,
Department of Humanities and Social Sciences,
Dhaka University of Engineering & Technology, Gazipur.
Present assessment system:

• Continuous assessment 30 %
1. Attendance 10%
2. Class test 20%
• Final exam 70%
WHY Economics introduced as a
discipline?

•Wants are Unlimited

•Resources are Limited
 Bases of all Economic Problems

1. Scarcity-limitation of resources
2. Choice- this problem comes from the problem of unlimited wants. As
your wants are unlimited but resources are limited, so you have to choice
between the wants you need to satisfy first. For example, as a students
you need a computer which will help in your study, at the same time you
also wants a motorbike which will help in your transportation. If your
budget is limited, you if to choice between the computer and the bike.
 Definition of ECONOMICS

Economics is the study of how societies

use scarce resources to produce
valuable commodities and distribute
them among different people.
Economics-
• Analyzes how a society’s institutions and technology affect prices and the allocation of
resources among different uses.
• Explores the behavior of the financial markets, including interest rates and stock prices.
• Examines the distribution of income and suggests ways that the poor can be helped
without harming the performance of the economy.
• Studies the business cycle and examines how monetary policy can be used to moderate
the swings in unemployment and inflation.
• Studies the patterns of trade among nations and analyzes the impact of trade barriers.
• Looks at growth in developing countries and proposes ways of encourage the efficient
use of resources.
• Asks how government policies can be used to pursue important goals such as rapid
economic growth, efficient use of resources, full employment, price stability and fair
distribution of income.
Scope and Importance of studding Economics
Dealing with a shortage of raw materials
To what extent should the government intervene in the
economy?
The principle of opportunity cost
Knowledge and understanding of economic problems
Forecasting
Evaluation
Applying economics in everyday life
Microeconomics:
Microeconomics is concerned with the individual parts of the economy.
The allocation of resources; and how prices, production, and the
distribution of income are determined. It is concerned with the demand and
supply of particular goods and services and resources cars, butter, clothes
and haircuts; etc.

Macroeconomics:
Macroeconomics is the study of very large, economy-wide aggregate
variables such as various indicators of the levels of total economic activity.
Thus macroeconomic analysis is concerned with our banking and monetary
systems and how the levels of gross national product, unemployment,
inflation and economic growth are determined in a society.
 Comparison between Microeconomics & Macroeconomics
Microeconomics Macroeconomics
• The branch of economics that studies • The brunch of economics that studies
the behavior of an individual the behavior of whole economy.
consumer, firm or of a family. • Deals with aggregate economic
• Deals with individual economic variables
variables
• Covers various issues like demand, • Covers various issues like, national
supply, product pricing, factor pricing, income, general price level,
production, consumption, economic distribution, employment, money etc.
welfare, etc. • Maintains stability in the general price
• Helpful in determining the prices of a level and resolves the major problems
product along with the prices of factors of the economy like inflation,
of production (land, labor, capital, deflation, unemployment and poverty
entrepreneur etc.) within the economy. as a whole.
 Engineering economics

•Definition:
Engineering economics is a subset
of economics concerned with the use and
"...application of economic principles" in the
analysis of engineering decisions.
Importance of studding Engineering
Economics
Making an effective manager & decision maker:
Helping in taking decision in changing and uncertain
business world:
Helps to measure the cost and benefit of a
engineering project:
Helps in skillful evaluation of a project:
Basic concepts of Economics
• A need is something you have to have, something you can't do
without. A good example is food. If you don't eat, you won't survive
for long.
• A want is something you would like to have. It is not absolutely
necessary, but it would be a good thing to have. A good example is a
car, cell phone etc.
• To have a Demand, have to fill up following three conditions-
1. desire to get the thing
2. ability to purchase
3. wish to expense for this thing
Basic concepts…
Wealth: Total of all assets of an economic unit that generate current income
or have the potential to generate future income. It includes natural resources
and human capital but generally excludes money and securities because
there present only claims to wealth.
Two common types of economic wealth are
1.Monetary wealth: anything that can be bought and sold, for which there is
market and hence a price. The market price, however, reflects only the
commodity price and not necessarily its value. For example, water is
essential for human existence but is usually very cheap.
2.Non-monetary wealth: things which depend on scarce resources, and for
which there is demand, but are not bought and sold in a market and hence
have no price. Examples are education, health, and defense.
Basic concepts…
Goods: A consumable item that is useful to people but scarce in
relation to its demand, so that human effort is required to obtain it.
1.Free goods are goods that exist in quantities that are more than
sufficient to meet demand at a zero price. In other words, for a free
good, at a zero price, the quantity supplied is larger than the quantity
demanded. The opportunity cost of producing a free good is zero.
Examples of free goods are desert sand and sea water.
2.Economic goods are goods that exist in quantities that are less than
sufficient to meet demand at a zero price. Thus, economic goods have a
positive price. The opportunity cost of producing an economic good is
positive. Examples of economic goods are shoes and computers.
Basic concepts…
Price and Value: price is determined by what (1) a buyer is willing to
pay, (2) a seller is willing to accept, and (3) the competition is allowing
to be charged.
On the other hands the value of good determined the worth and
benefits arising from that goods.
Example: The price & value of water and diamond in this case is the
best example.
In terms of price, a bottle of water is very cheep relative to a very small
piece of a diamond. But in terms of value….???
Basic concepts…
Utility: The benefit or satisfaction arise from the consumption of a
good or service.
Total utility is the aggregate sum of satisfaction or benefit that an
individual gain from consuming a given amount of goods or services in
an economy.
Marginal utility is the additional satisfaction, or amount of utility,
gained from each extra unit of consumption. Utility of last unit added.
Basic concepts…
Production: By production, generally, we mean to create something. But
man can create nothing.
In Economics, production is the processes and methods used to transform
tangible inputs (raw materials, semi-finished goods) and intangible inputs
(ideas, information, knowledge) into goods or services.
Budget: A budget is a description of a financial plan or a periodic list of
income and expenditure.
Balanced budget: Income equal to expenditure
Surplus budget: Income greater than expenditure
Deficit budget: Income less than expenditure
Basic concepts…
Resources: The resources of a society consist not only of the free gifts of nature
such as land, forests and minerals, but also human capacity, both mental and
physical, and of all sorts of man-made aids to further production, such as tools,
machinery, and buildings.
Resources are divided into three main groups:
1) all those free gifts of nature, such as land, forests and minerals etc. commonly
called natural resources and known to economist as land.
(2) All human resources, mental and physical, both inherited and acquired, which
economist call labor.
(3) all those man-made aids to further production, such as tools, machinery, and
factories, which are used up in the process of making other goods and services
rather than being consumed for their own shake, which economist call capital.
Often a fourth resource is distinguished. This is entrepreneur ship from the French
word entrepreneur meaning who undertakes task.
Basic concepts…
Investment: Economists mean the production of goods that will be
used to produce other goods
1.Fixed income investment such as bonds, fixed deposits, preference
shares, and
2.Variable income investment such as business ownership (equities),
or property ownership.
Consumption: The act of using these goods and service to satisfy wants
is called consumption. This will normally involve purchasing the goods
and services.
 Economic Efficiency
Economic efficiency is when all goods and factors of production in an economy are
distributed or allocated to their most valuable uses and waste is eliminated or
minimized.

Key Takeaways:
Economic efficiency is when every scarce resource in an economy is used and
distributed among producers and consumers in a way that produces the most
economic output and benefit to consumers.
Economic efficiency can involve efficient production decisions within firms and
industries, efficient consumption decisions by individual consumers, and efficient
distribution of consumer and producer goods across individual consumers and firms.
Pareto efficiency is when every economic good is optimally allocated across
production and consumption so that no change to the arrangement can be made to
make anyone better off without making someone else worse off.
 Opportunity Cost
Opportunity cost is the value of something when a particular course of
action is chosen. Simply put, the opportunity cost is what you must
forgo in order to get something. The benefit or value that was given up
can refer to decisions in your personal life, in a company, in the
economy, in the environment, or on a governmental level.
Simply, opportunity cost is the cost of best alternatives or it is the
cost of second best choices.
An easy example of opportunity cost
For example, instead of attending classes you had many opportunities
to do. Suppose, you could –
1. Sleep
2. Watching movie
3. Travelling
4. Praying
5. Playing etc.
Among all of these alternatives, suppose you could get more pleasure
from sleeping. That is sleeping is the best alternative of attending class.
So we can say that, the opportunity cost of attending class is sleeping.
 Some examples of Opportunity Cost
• The opportunity cost of taking a vacation instead of spending the money on a
new car is not getting a new car
• If you decide not to go to work, the opportunity cost leisure is the lost wages.
• When the government spends $15 billion on interest for the national debt, the
opportunity cost is the programs the money might have been spent on, like
education or healthcare.
• For a farmer choosing to plant corn, the opportunity cost would be any other
crop he may have planted, like wheat or sorghum.
• Tony buys a pizza and with that same amount of money he could have bought a
drink and a hot dog. The opportunity cost is the drink and hot dog.
• Mario has a side business in addition to his regular job. If he decides to spend
more time on his side business, the opportunity cost is the wages he lost from his
regular job.
Economic Growth
Economic growth is an increase in the the production of economic goods and
services, compared from one period of time to another. It can be measured in
nominal or real (adjusted for inflation) terms. Traditionally, aggregate economic
growth is measured in terms of gross national product (GNP) or gross domestic
product (GDP), although alternative metrics are sometimes used.
Note that-
• Economic growth is an increase in the production of goods and services in an
economy.
• Increases in capital goods, labor force, technology, and human capital can all
contribute to economic growth.
• Economic growth is commonly measured in terms of the increase in aggregated
market value of additional goods and services produced, using estimates such as
GDP.
• What Is Economics?
Economics is a social science concerned with the production, distribution, and consumption of
goods and services. It studies how individuals, businesses, governments, and nations make choices
on allocating resources to satisfy their wants and needs, trying to determine how these groups
should organize and coordinate efforts to achieve maximum output.
• economics is the study of how people allocate scarce resources for production, distribution, and
consumption, both individually and collectively.
• Two major types of economics are microeconomics, which focuses on the behavior of individual
consumers and producers, and macroeconomics, which examine overall economies on a regional,
national, or international scale.
• Economics is especially concerned with efficiency in production and exchange and uses models
and assumptions to understand how to create incentives and policies that will maximize
efficiency.
• Economists formulate and publish numerous economic indicators, such as gross domestic product
(GDP) and the Consumer Price Index (CPI).
• Capitalism, socialism, and communism are types of economic systems.