CHAPTER 1: THE WHY & WHO OF
ECONOMICS
EKN 110
Notes by Jolize Stephens
, 1. We all think like economists
- Father of Economics = Adam Smith
- We make decisions.
E.g., Wake up, get ready, eat breakfast & go to your class. → You
have decided to get out of bed, get ready, eat & go to class.
- Economists advise the government on how to spend taxpayers’
money more efficiently.
∴ Above mentioned, involves choices i.e., selection based on:
▪ Availability
▪ Cost of projects
▪ Skills to perform & sustain project
▪ Time frames
1|Page
, Economics
Economics is the study of how individuals,
Definition: businesses & institutions make choices, to optimise
their level of satisfaction under conditions of
scarcity.
- People want numerous & varied items.
E.g., Houses, stable internet, soft drinks, etc.
∴ Productive resources = processed by society:
▪ Tools & machinery
▪ Labour & managerial talent
▪ Land & mineral deposits
Productive resources help economists to produce goods &
services which satisfy our economic wants.
2|Page
, 1.1) Something to consider
- “Buy 1 get 1 free” (In reality, we do not get free stuff.)
How does it work to get a product for “free”?
To produce each product RESOURCES are
used. These resources have alternative uses. ∴
Society gives up something else in order to get a
“free” product.
- MARKETING plays a big role in handing out “free” products for
people to support their business.
2. The Economic Perspective
Economic perspective
A viewpoint that envisions individuals & institutions
Definition: making rational decisions by comparing the
marginal benefits & the marginal costs associated
with their actions.
3|Page
ECONOMICS
EKN 110
Notes by Jolize Stephens
, 1. We all think like economists
- Father of Economics = Adam Smith
- We make decisions.
E.g., Wake up, get ready, eat breakfast & go to your class. → You
have decided to get out of bed, get ready, eat & go to class.
- Economists advise the government on how to spend taxpayers’
money more efficiently.
∴ Above mentioned, involves choices i.e., selection based on:
▪ Availability
▪ Cost of projects
▪ Skills to perform & sustain project
▪ Time frames
1|Page
, Economics
Economics is the study of how individuals,
Definition: businesses & institutions make choices, to optimise
their level of satisfaction under conditions of
scarcity.
- People want numerous & varied items.
E.g., Houses, stable internet, soft drinks, etc.
∴ Productive resources = processed by society:
▪ Tools & machinery
▪ Labour & managerial talent
▪ Land & mineral deposits
Productive resources help economists to produce goods &
services which satisfy our economic wants.
2|Page
, 1.1) Something to consider
- “Buy 1 get 1 free” (In reality, we do not get free stuff.)
How does it work to get a product for “free”?
To produce each product RESOURCES are
used. These resources have alternative uses. ∴
Society gives up something else in order to get a
“free” product.
- MARKETING plays a big role in handing out “free” products for
people to support their business.
2. The Economic Perspective
Economic perspective
A viewpoint that envisions individuals & institutions
Definition: making rational decisions by comparing the
marginal benefits & the marginal costs associated
with their actions.
3|Page
