2. Objectives
• Define economics;
• Discuss the different terms related to economic;
• Familiarize with contribution of well-known economist and;
• Discuss the economic goals and importance of economics in everyday living.
3. What is economics?
economic is the study of social behavior guiding in the allocation of scarce resources to
meet the unlimited needs and desires of the individual members of a given society.
Economics is from the Greek word “oikos” which means household or family and
“nonos” meaning management.
During the ancient times, family is the most observed organization.
“Oikonomos” includes the management of wealth and customs of the family with later on
form part of the society.
4. THE MAIN FOCUS OF ECONOMICS ARE
“CHIOCE” AND “DECISION-MAKING”
5. Terms related to Economics
1.Economic is ultimately concerned with why, when and how human
beings trade with each other in society.
2.Needs are important for the human being to survive.
3.Choice involves selecting and decision-making. It is considered as
the ultimate power of human.
4.Resources are natural, i.e. land, air, water, mineral and man-made
materials, i.e capital, machinery and the like.
5.Proper management, distribution and allocation of resources will
suffice the welfare of human and society.
6. Adam Smith (1732-1790)
Father of classical economics
“Economics is concerned on the
production of wealth”.
The production an distribution of wealth
will happen in a market economy which
the “invisible hand” is taking in charge.
In Adam Smith’s book, “Inquiry into the
Nature and Causes of the Wealth of
Nations (1776).
7. “Economics is a study of human as they live and
move and think in the ordinary business of life”.
He claimed that, “Economics is a study of
mankind in the ordinary business of life, it
examines that part of individual and social action
which is most closely connected with the
attainment and with the use of the material
requisites of well-being.
Alfred Marshall (1842-1924)
8. “Economics is the science which studies human
behavior as a relationship between ends and
scarce mean which have alternative users”.
He linked the word “ scarcity and human
behavior”
He discussed in his book “An essay on the
Nature and Significance of Economic Science”,
that human welfare cannot be measured by
money alone.
Lionel Robbins (1898-1984)
9. Economic Goals
Efficiency and Full Employment
Efficiency means the ability to produce a desired result with the least cost possible
or without any waste. It is achieved when society is able to get the greatest amount
of satisfaction from the available resources.
Full employment is an economic situation when all available labor resources are fully
utilized.
Equity
Equity treats a valuable supports to achieve fairness and greater outcomes while
equality upholds equal opportunity among other.
Equity is achieved when income and wealth are fairly distributed within the society.
10. Stability
Economic stability refers to the strong macroeconomic foundation where employment,
production and prices are firm and constant.
Economic Growth
Economic growth refers to the situation where in there is an increase in the overall output
or production.
Economic growth is also indicated by increase in the quantities of the resources.
