Introduction to Economics PDF

ECONOMIC NEWS Economics Revision News Flash Since 2017 Intro to Economics Economics is the study of how people, businesses and the government make choices about how to allocate scarce or limited resources. An Economy is a system (an organised set of interrelated ideas or principles) that tries to so...

ECONOMIC NEWS Economics Revision News Flash Since 2017 Intro to Economics Economics is the study of how people, businesses and the government make choices about how to allocate scarce or limited resources. An Economy is a system (an organised set of interrelated ideas or principles) that tries to solve the basic economic problem. Economic Data consists of facts gathered for economic reference or analysis, such as the amount of money that companies pay in tax or how much money a country is in debt. Economic models help economists to logically isolate and investigate the cause and effect between many interacting elements in an economy and evaluate the likely outcome of alternative policy options. Need and Wants: A need is something we need to survive e.g Food,Shelter whereas a want is something more, that we do not need to survive e.g. holiday, car. Opportunity Cost is the item that was not chosen when you make a choice. Markets is a place where buyers and sellers meet. Margin is the change in a variable caused by an increase of one unit of another variable. E.g buying a drink, we think of the value we get from that one extra drink. Do all consumers act rationally? Most consumers act rationally, but can be influenced by: 1. Following a fashion trend (or not!) 2. The paradox of choice- Too much choice. 3. Value consciousness- Organic, Sustainable. 4. Habitual favour- Habits of using the same products. 5. Incomplete information- Special offers. 6. Rule of thumb-Always go with cheapest/biggest. 7. Anchoring behaviour-Influenced by prices of other products. In other words, choices need to be made about how to allocate scarce resources (economic goods) among alternative uses, and there is always an opportunity cost. 1929- The Great Depression (Wall Street) 2007-The Great Recession (Global) 2020-Global Pandemic (Covid-19) Models provide a way to organise an economists thoughts. Visual Models- Pictures that tell an economic story e.g. charts, graphs or curves. Positive statements: Objective statements that can be proven or disproven ‘the economy grew by 3% in the last quarter’. These figures can be checked on CSO.ie and proven true or false. Normative statements: These statements cannot be upheld or disproved. “The European commission recommends the need for capital investment.” These statements are opinions about how economies and markets ought to work and are based on personal beliefs, values or political persuasion. Mathematical Models- Equations with many economic variables e.g. maths calculation or equation. Economics Revision 1 The Business Department © 2024