2. Economy and Economics
Economy: How a society`s resources are shared, the way in which
goods and services are produced, distributed and consumed.
Economics: Science that studies how a society`s resources are
shared, the way in which goods and services are produced,
distributed and consumed.
It comes from the Ancient Greek “oikos” which means household,
and “nomos” which means rule.
3. Economics studies
how people and
societies make
decisions in order to
obtain goods and
resources.
This decisions are
necessary because
resources are limited
and sometimes even
scarce.
Supply
Demand
4. The Classical
economic analysis
assumes that if demand
increases faster than
supply, the prices will
rise and the firms will
respond by increasing
the supply.
Currently, economists
have created a branch
called macroeconomics
as they find out that
when economy affects
states or even
continents it is not only
affected by the supply
and demand law.
5. Microeconomics:
focuses on the
economy of
individuals,
households, small
shops…
Macroeconomics:
focuses on the
economy of an
autonomous
community, state, a
continent…
7. Economic Goods
Products are things we can buy that we can use
or touch (clothes, car, machinery, computers…)
Services are things we buy that we can not touch,
is something that someone does for us (a haircut,
assistance from a doctor, teach you geography…)
Economic
Goods
Composition
Consumable
Capital
goods
Function
Intermediate Finished
Ownership
Private Public