eot econ

Define the term "economics"

• Economics is defined as the human science which studies the relationship between scarce resources and the various uses which compete for these resources.

Important Terms in Economics: Scarce Resources, Goods, and Services

• Scarce resources: lack of availability of supplies required to maintain life or a certain quality of life.
• Goods: physical, tangible items that can be produced, bought, and sold (Example: Food, Clothing, Furniture).
• Services: non-physical, intangible items provided by firms and paid by customers (Example: haircut, education, taxi, hotels etc.).

Differentiate between Needs and Wants in Economics

• Needs: essential goods and services required for human survival. These include nutritional food, clean water, shelter, protection, clothing, and access to healthcare and education.
• Wants: goods and services that are not necessary for human survival but are human desires; basically, things we would like to have.

What are the two main Branches of Economics?

• There are two types of Economics:

1. Micro-Economics
2. Macro-Economics
   • Microeconomics: concerned with small parts of the economy and the inter-relationships between these parts (e.g., explaining movements in the prices of shoes).
   • Macroeconomics: concerned with the behaviour of broad aggregates (collection or total) affecting the whole economy (e.g., inflation, unemployment, economic growth etc.).

Key aspects of Micro-Economics

• This is the study of how households and firms make decisions and how they interact in markets.
• It studies particular markets and sections of the economy, rather