Introduction to Economics

Study Notes

Economics studies how people make rational decisions to satisfy unlimited needs with limited resources.
Economic rationalism is the idea that individuals make decisions based on maximizing their satisfaction and income while minimizing expenses and costs.
Needs are desires to eliminate a feeling of lack, and they are unlimited.
Goods are anything that satisfies a need.
- Free goods are unlimited and not sold.
- Economic goods are limited, sellable, and satisfy a need.
- Final goods are directly used to satisfy a need.
- Producer goods are used to produce other goods.
- Material goods are tangible and measurable.
- Non-material goods are usually services.
Utility is a measure of satisfaction gained from consuming goods or services. It cannot be directly measured.
Market value is the price of something determined by supply and demand.
Economic value is the maximum price a customer is willing to pay for something.

A business or firm provides products or services desired by customers.
The goal of a business is to serve customer needs and make profits for the owners.

Business Economics or Managerial Economics uses economic tools and techniques to make business and management decisions.
It helps managers understand the economic forces that affect their organizations and the consequences of their decisions.