ECONOMICS

Economics

A social science that studies and seeks to allocate scarce human and non-human resources among alternative uses to satisfy unlimited human needs and wants.

Factors of Production

Resources directly used to produce goods and services, including land (rent), labor (salary/wage), capital (interest), and entrepreneurship (profit).

Needs

Essential requirements for survival and well-being, such as food, shelter, clothing, water, education, and healthcare.

Wants

Desires beyond basic needs, like jewelry, gadgets, and vehicles.

Economic Systems

Different methods of resource allocation, including Command (central authority), Market (based on demand and supply), and Tradition (based on historical practices).

Law of Demand

States that as the price of a commodity increases, the quantity demanded decreases, assuming other factors remain constant.

Income Constraint

Limitation on purchasing power due to available financial resources.

Diminishing Marginal Utility

Decrease in additional satisfaction gained from consuming more units of a good or service.

Law of Supply

Indicates that as the price of a commodity increases, the quantity supplied increases, assuming other factors remain constant.

Profit Motive

Driving force behind individuals and firms seeking financial gain as a primary incentive for economic activities.

Diminishing Marginal Returns

Reduction in incremental output gained from an additional unit of input while keeping other inputs constant.

IRON HAND

COMMAND (Iron Hand) that divides how resources are distributed

INVISIBLE HAND

MARKET(invisible hand) nobody dictates but the market forces, resources are distributed based on demand supply, price and, quantity 

Market forces based on 

- Law of Demand

- Law of Supply

- Price Levels and Quanitity

DEADMANS HAND

TRADITION (Dead Mans Hand) determines how resources are distributed; based on the past on how resources are allocated