Introduction to Economics: Main Concerns

Economic Resources

• Land: Provides natural resources essential for production, leading to the generation of income through agriculture, forestry, mining, and real estate.
• Labor: Represents the human effort and skills involved in production, resulting in productivity and growth in various sectors.
• Capital: Refers to manufactured assets like machinery and tools that enhance efficiency and output in production processes.

Economic Problem

• Defined as the scarcity of resources relative to limitless human wants, necessitating choices and trade-offs in resource allocation.

Production Possibilities Curve (PPC)

• Illustrates the maximum feasible output combinations of two goods produced in an economy, highlighting trade-offs and opportunity costs when resources are diverted from one product to another.

Main Concern of Economics

• Examines how society utilizes limited resources to satisfy unlimited wants, focusing on the allocation and distribution of these resources effectively.

Branches of Economics

• Macroeconomics: Analyzes and studies the overall economy, including inflation, unemployment, and national income, emphasizing the economy as a whole.

Positive Economics

• Concentrates on objective analysis of economic phenomena, focusing on what is, and explaining facts and cause-effect relationships without involving value judgments.

Normative Economics

• Deals with subjective value-based analysis, focusing on what ought to be, including opinions on economic policies and their implications.

Types of Economic Resources

• Natural resources (land), human resources (labor), manufactured resources (capital), and entrepreneurial resources (innovation and risk-taking).