OIKOS(HOUSEHOLD) + NOMOS(RULES)

OIKONOMIA

ECONOMICS

DEF T O :O KO O AA AGE E T OF HOUSEHOLD

Proper utilization of scarce resources for the maximum satisfaction of man s unlimited wants. Wise and proper use of resources for the common development of men. A social science that analyzes the production, distribution and consumption of goods and services. As an applied science

Efficient utilization of resources Profit maximization(wealth accumulation) Proper allocation of wealth(distributive justice)

E O O

Everything is an ECONOMY and everybody is an ECONOMIC AGENT.

Major Branches of Economics

Microeconomics: deals of specific entities/the segregates/the consumer and the firm. (Production & Consumption Theories Macroeconomics: deals with the aggregate variables/ total/national variables (Growth, Development, investment & Employment Theories)

Positive Economics
(What it is)

VS Normative Economics
(What should be)

Fundamental Economic Questions

What to produce? How much to produce? How to produce? For whom to produce?

Economic Systems

(Capitalism) Market Economy

(Socialism) Command Economy

MARKET E O OMY
Private Ownership & Free Competition Laissez Faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies. The phrase laissez-faire is French and literally means "let do", but it broadly implies "let it be", or "leave it alone.

Invisible Hand
In economics, the invisible hand, also known as the invisible hand of the market, is the term economists use to describe the self-regulating nature of the marketplace. This is a metaphor first coined by the economist Adam Smith in The Theory of Moral Sentiments. For Smith, the invisible hand was created by the conjunction of the forces of self-interest, competition, and supply and demand, which he noted as being capable of allocating resources in society.This is the founding justification for the laissez-faire economic philosophy.[

COMMA D ECO OMY

Factor resources are government-owned and the whole economy is controlled by the government. Government planners decide which and how goods and services are produced and how they are distributed. Also called a centrally PLANNED ECONOMY.

Economic Resources/FOPs

Land Labor Capital Entrepreneur

LA D
All natural resources

LABOR
All human effort exerted in the production

CAP TAL
All man-made resources

E TREPRE EUR
Economic manager who combines the other FOPs

Which among the FOPs is the most important?

CAPITAL

Circular Flow of Economic Activity

PAYMENTS

Goods & Services

HOUSEHOLDS
FOPs LLCE

FIRMS

PAYMENTS:Rents/Wages/Interests/Profits

What s the state of the world economy today?

Economics in the world is in its worst today.

 Highest inequality  Highest poverty incidence  Inefficient use of resources  Environmental destruction & ecological

disharmony  Structural violence

FACTS
 Economics is the dominant sphere of human

life.  Economics is about choice.  Economics is accepted as a separate social science.  Economics treats a person as a onedimensional being.

So What is your ECONOMICS?

 Are you a part of what makes the economy

worse?  Are you a part of what it takes to create good economics?