Basic

Microeconomics
 What is Economics?
Economics is the study of proper and efficient use
of scarce resources to produce commodities for
the satisfaction of human wants. It is related to
other social sciences discipline such as
Anthropology, Political Sciences, Sociology,
Psychology, and History for it deals with the
individual and how he interacts with a group.
 What is Economics?
Economics is divided into two branches:
microeconomics and macroeconomics.
Microeconomics deals with behaviour of
individual component. In contrast,
macroeconomics deals with the behaviour of
economy as a whole.
 What is Economics?
Other dichotomies of economics are: normative
economics and positive economics. Normative
Economics involves ethics and value judgments.
It has something to do with “what ought to be.” On
the other hand, positive economics describes
facts and data, and has something to do with
“what is.”
 Goals of Economics
1. To strengthen economic freedom. Economic
freedoms include consumer choice, freedom of
occupational choice, freedom to consume or save,
freedom to own properties, freedom of enterprise.

2. Promote economic efficiency. Efficiency is

producing more output with the use of fewer
resources.
 Goals of Economics
3. Promote economic stability. Stability means there
is no violent ups and downs in the economy.

4. To improve economic security. To increase

individual security has been an important goal of
economics.
 Goals of Economics
5. Attaining a high level of growth in the economy.
Economic growth means that the capacity to produce goods
and services is increasing, and it is growing more rapidly than
the population.
Growth is determined by two factors: (1) expansion in the
resources available for producing goods and services (2)
improved skills and technology, including managerial and
entrepreneurial skills
Two basic responsibilities in promoting economic growth:
(1) to provide law and order (2) to provide public services