In this slides you can get knowledge about basic of economics. Thank you!

1. ENGINEERING ECONOMIC
Presented by
MS.MONIKA MISHRA
LECTURER
SOPHITORIUM INSTITUTE OF TECHNOLOGY
AND LIFE SKILLS,KHORDHA

2. What Is Economics?
ECONOMICS is the study of fulfilling unlimited
wants with available scarce resources.
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 about how
to allocate resources.

3. What is Engineering?
• Engineering is the application of science.
• Engineering is the use of scientific principles
to design and build machines, structures, and
other items, including bridges, tunnels, roads,
vehicles, and buildings.

4. Engineering Economics
• “Engineering Economics refers to those
aspects of economics and its tools of analysis
most relevant to the Engineer’s decision
making process”.
• Engineering economics involves the
systematic evaluation of the economic
benefits of proposed solutions to engineering
problems.

5. Central/Basic Economic Problems of
any Economy
• All modern economies have certain fundamental or
basic economic problems to deal with. The limited
resources have led to the problem of how to assign the
scare resources in order to achieve maximum
satisfaction.
• There is the need to economize and utilize these
resources in the most efficient manner in order to
satisfy the welfare of the society.
• These problems are called central economic problems
because other problems revolve around them. They
are:-

6. What to produce
• This has to do with the problem of allocation
of resources among different goods and
services. It involves selection of what should
be produced and in what quantity in order to
satisfy consumer wants as best as possible
using the available resources.

7. How to Produce: -
• This problem refers to selection of appropriate
technique of production, that is,how to
combine resources in other to produce goods
and service in a more efficient way and at a
minimum cost.

8. For whom to produce
• This economic problem focuses on how the
national product is to be distributed among the
members of the society, that is, how the
consumer goods and capital goods will be
distributed.
• Should the economy produce goods for those
with high incomes or for those with low income?
• What demographic group should production be
targeted at?

9. What provision should be made for
economic growth?
• This problem deals with how to decide on
how much saving and investment should be
made for future economic growth. No society
or individual would like to use all its scarce
resources for only current consumption or
else future production will remain stagnant
leading to a decline in the levels of living.

10. NATURE OF ECONOMICS
• ECONOMICS IS AN ARTS
• ECONOMICS IS A SCIENCE
 POSITIVE SCIENCE
 NORMATIVE SCIENCE
IF SCIENCE
• (i) It is based on systematic study of knowledge or facts;
• (ii) It develops correlation-ship between cause and effect;
• iii) All the laws are universally accepted
• (iv) All the laws are tested and based on experiments;
• (v) It can make future predictions;
• (vi) It has a scale of measurement.

11. Positive science- (fact) what it is?
Normative science-(assumption)what should
be?

12. All these lead us to the conclusion that ‘Economics’ is
both positive and normative science. It does not only tell
us why certain things happen however, it also gives idea
whether it is right thing to happen.
• Economics as an Art:
Eonomics is also considered as an art. In other way, art is
the practical application of knowledge for achieving
particular goals. Science gives us principles of any
discipline however, art turns all these principles into
reality. Therefore, considering the activities in economics,
it can claimed as an art also, because it gives guidance to
the solutions of all the economic problems.

13. • Therefore, from all the above discussions we
can conclude that economics is neither a
science nor an art only. However, it is a golden
combination of both.
• Hence, economics is considered as both a
science as well as an art.

14. TYPES OF ECONOMICS
Economics is of two types:-
economics
macromicro

15. Microeconomics: -
• The word micro is derived from the Greek word mikros
meaning small.
• Microeconomics is a branch of economics that is
concerned with the behavior of individual
• consumers, firms, industries, commodities and prices.
It studies how decisions made by individuals
• and businesses affect the prices of goods and services.
The main objective of microeconomics is to
• maximize utility and minimize cost. It is also known as
the price theory.

16. Macroeconomics: -
• The word macro is derived from the Greek word
makros meaning large. It is that branch of
economics that focus on the impact of choices on
the total or aggregate level of economic activities.
Macroeconomics is the study of aggregates of
individuals, firms, prices and outputs. In
• other words, it studies the economy as a whole. It
analyses issues such as aggregate level of
employment, the general price level, aggregate
savings and investment in the economy.

17. THANK YOU!