Introduction to Economics

What is Economics?

• Economics is the study of how societies make choices regarding the production, distribution, and consumption of goods and services, given scarce resources.
• It explores how individuals, businesses, and nations allocate resources to meet their needs and wants.

Microeconomics

• Focuses on individual economic decisions and their impact on resource allocation.
• Analyzes how individuals make choices when faced with scarcity, and how these choices influence prices and production levels.

Macroeconomics

• Studies the performance of the overall economy, analyzing factors such as inflation, price levels, economic growth, national income, and unemployment.

Economic Systems

• Different systems (such as capitalism, socialism, and mixed economies) define how resources are owned and controlled, and how goods and services are produced and distributed.

Scarcity, Trade-offs, and Opportunity Cost

• Scarcity refers to the limited availability of resources relative to unlimited wants.
• Trade-offs involve making choices between competing options, as resources are limited.
• Opportunity cost represents the value of the best alternative forgone when a decision is made.

Law of Supply and Demand

• The law of demand states that as the price of a good decreases, the quantity demanded increases, assuming other factors remain constant.
• The law of supply states that as the price of a good increases, the quantity supplied increases, assuming all other factors remain constant.

Gross Domestic Product (GDP)

• Represents the total value of all goods and services produced within a country's borders during a specific period (usually a year), regardless of ownership.

Per Capita Income

• Calculated by dividing a country's total national income by its population.

UAE Economic Strategies

• Historical Context: UAE's economic growth has been significantly impacted by the discovery of oil.
• Economic Diversification: The UAE government is actively pursuing strategies to diversify its economy and reduce dependence on oil revenues.
• Key Sectors: The UAE is focusing on key non-oil sectors such as tourism, aviation, retail, hospitality, real estate, construction, trade and investment, and aerospace and technology.
• International Trade: The UAE is striving to enhance its competitiveness in global markets and expand its international trade.

Abu Dhabi Economic Vision 2030

• A long-term initiative launched by the government of Abu Dhabi to stimulate sustainable economic growth, diversification, and global competitiveness.
• Includes strategic pillars focused on economic diversification, infrastructure development, human capital enhancement, and social development.

UAE Vision 2021

• The government aims to achieve sustainable development through economic diversification by investing in non-oil sectors to reduce its reliance on oil revenues.

Public Private Partnership

• Encourages collaboration between the public and private sectors to carry out projects and boost economic growth.

Value Added Tax (VAT)

• Introduced in the UAE in 2018 at a rate of 5%.
• Aims to provide a new source of income for the UAE government to fund public services and reduce reliance on oil revenue.

Digital Economy Strategy

• Aims to double the contribution of the digital economy to the UAE's non-oil GDP within 10 years, reaching 20% by 2031.

Circular Economy

• The UAE government has adopted a Circular Economy Policy to achieve sustainable governance and resource management, ensuring the quality of life for present and future generations.
• Focuses on infrastructure, sustainable transportation, manufacturing, food production, and consumption.

Understanding GDP and International Trade

• A game-based learning tool to help visualize the relationship between GDP and international trade.

What is Economics?

• Economics is a social science that examines how individuals, businesses, governments, and nations make choices about allocating resources to fulfil wants and needs.

Microeconomics

• Studies how personal decisions impact the use and distribution of scarce resources.
• Analyzes why different goods have different values.
• Investigates how individuals make more efficient or productive choices.

Macroeconomics

• Focuses on the behavior of the aggregate economy.
• Examines various economic phenomena, such as inflation, price levels, growth rates, national income, GDP, and unemployment changes.
• Analyzes economic trends and how the entire economy moves.

Opportunity Cost

• The benefit of the next best alternative that is sacrificed to satisfy a want.
• The best thing given up to get what one wants.

Law of Demand

• Indicates that as the price of a good decreases, consumers buy more of it.
• As the price of a good increases, consumers buy less of it.

Factors Affecting Demand

• Prices of Goods
• Consumer Income
• Prices of Related Goods
• Population Background/Trends
• Tastes and Habits

Law of Supply

• States that the quantity of a good supplied increases when the price of the good rises, assuming other factors affecting supplier decisions remain constant.

Gross Domestic Product (GDP)

• The total value of all economic activities within a country in a fiscal year.
• Includes the profits of foreign-owned firms operating within the country.

Per Capita Income

• Calculated by dividing the total national income by the nation's population.

UAE Strategies for Economic Development

• Emphasize historical context, oil discoveries, economic diversification, key sectors, and international trade.

Abu Dhabi Economic Vision 2030

• A long-term economic initiative aimed at sustainable growth, diversification, and global competitiveness.
• Outlines key priorities, including economic diversification, infrastructure development, human capital enhancement, and social development.

Economy and Vision 2021

• Aims for sustainable development through economic diversification with investments in non-oil sectors.
• Prioritizes key sectors like tourism, aviation, retail, hospitality, real estate, construction, trade and investment, aerospace, and technology to reduce reliance on oil revenues.

Value Added Tax (VAT)

• Introduced in the United Arab Emirates on January 1, 2018.
• The rate of VAT is 5%.
• Provides a new source of income for the UAE, supporting the provision of high-quality public services.
• Promotes the vision of reducing dependence on oil and hydrocarbons as revenue sources.

Digital Economy Strategy

• Aims to double the contribution of the digital economy to the UAE's non-oil GDP from 11.7% to over 20% within a decade.

Circular Economy

• The UAE Circular Economy Policy aims to provide a framework for achieving sustainable governance and efficient use of natural resources.
• Prioritizes infrastructure, sustainable transportation, manufacturing, food production, and consumption.

UAE Economic Outlook

• The economic outlook is positive, with an emphasis on continued diversification away from oil dependence.
• Key sectors like tourism, real estate, and technology are expected to drive growth.