Module 1: introduction to Micro and Macro economics
Meaning of economics
Economics is a subject that studies those activities of man which are concerned
worth the maximum satisfaction of wants or with the promotion of welfare and
economic growth by the efficient consumption, production and exchange of
scarce means having alternative uses.
Study of human behaviour to predict the way they consume.
Products are rare there is only so much you can offer. (supply and demand)
(circular flow)
Wants= desire (food can become a desire when you want to eat in a star
restaurant)
Needs: water/food, first you will fulfil these.
Meaning and subject-matter of micro-economics
= the behaviour of individual decision making units
consumers, firms, resource owners
Micro-economics decides over labour and finances,…
It analyses the behaviour of consumers, what the best price is, how much they
want to consume, and what kind of products most people reach for
The price theory
sets the price for a product
By using micro economical strategies we can set prices, and cater to the
costumers in the best way possible
It solves 3 central problems
What
How
For whom
Well-being and economics
Expansion of needs with time-limited resources and ever-growing desires
o Saving = long term well-being
o Spending money on desires won’t affect your well-being
o Wealth= how much money you have, the power of money, you are
able to afford basic needs
It’s different for everybody: for someone in a war country
wealth can be basic needs
Discuss ways to meet growing needs
Economic (survival) vs happiness and well-being
What is wealth?
,
Meaning of economics
Economics is a subject that studies those activities of man which are concerned
worth the maximum satisfaction of wants or with the promotion of welfare and
economic growth by the efficient consumption, production and exchange of
scarce means having alternative uses.
Study of human behaviour to predict the way they consume.
Products are rare there is only so much you can offer. (supply and demand)
(circular flow)
Wants= desire (food can become a desire when you want to eat in a star
restaurant)
Needs: water/food, first you will fulfil these.
Meaning and subject-matter of micro-economics
= the behaviour of individual decision making units
consumers, firms, resource owners
Micro-economics decides over labour and finances,…
It analyses the behaviour of consumers, what the best price is, how much they
want to consume, and what kind of products most people reach for
The price theory
sets the price for a product
By using micro economical strategies we can set prices, and cater to the
costumers in the best way possible
It solves 3 central problems
What
How
For whom
Well-being and economics
Expansion of needs with time-limited resources and ever-growing desires
o Saving = long term well-being
o Spending money on desires won’t affect your well-being
o Wealth= how much money you have, the power of money, you are
able to afford basic needs
It’s different for everybody: for someone in a war country
wealth can be basic needs
Discuss ways to meet growing needs
Economic (survival) vs happiness and well-being
What is wealth?
,
