ECON- LESSON 1

ECONOMICS

the social science that studies how individuals, businesses, governments, and societies allocate scarce resources to satisfy their unlimited wants and needs. It examines how people make choices in a world with limited resources, aiming to maximize their wellbeing or utility.

microeconomics

macroeconomics

Economics is divided into two broad branches:

microeconomics,

focuses on individual economic agents such as households and firms

macroeconomics

studies the overall economy, including factors like inflation, unemployment, and economic growth

SCARCITY

CHOICE

OPPORTUNIY COST

BASIC ECONOMICS CONCEPTS:

scarcity

It refers to the limited availability of resources compared to the infinite wants and needs of individuals and society. Resources such as raw materials, labor, and capital are limited, while demands for goods and services are seemingly insatiable.

choice

Is the process of selecting one option or course of action over others. Because of scarcity, individuals and organizations must make choices to allocate resources wisely.

Opportunity Cost

Is the value of the next best alternative that must be foregone when a decision is made. In other words, it is the cost of choosing one option over another.

PRINCIPLES OF ENGINEERING ECONOMICS