FOUR KEY ELEMENTS Of ECONOMICS

Person who studies all that goes on within the functionality of our economic systems and choices Concerned with how the goods and services are produced and distributed ECONOMISTS

ECONOMICS A social science Observes the behavior of people as they deal with the basic issue of limited resources and unlimited wants The study of human effort to satisfy seemingly unlimited and competing wants through the careful use of relatively scarce resources Studies the decisions that people (individuals) make about using a variety of resources ECONOMICS

Involves the effects of economic forces upon the individual parts of the economy Businesses Households Individual Microeconomics

Involves the impact of change on the economy as a whole rather than on an individual part Unemployment Inflation GDP Money Supply Business Cycle Macroeconomics

The Four Key Elements Economics Analyze Explanation Description Predictions Economics

Analyze Scrutinize all aspects of economic activities Discover why things work How things happen Why do some people earn higher incomes How do taxes affect people’s desire to work and save Recommended Family size Analyze

Explanation Communicate newly acquired knowledge to others Really answer: the HOW and WHY How people are spending less Why or why not an economic measure is performing in the expected manner Explanation

HOW IS IT WORKING

If there is a common understanding of the way our economy works, some economic problems will be easier to fix

Economics is a study of both what is happening and what tends to happen, it can forecast what may happen in the future, including the most likely effects of different actions Predictions

Predictions

The social science concerned with the efficient use of limited/scarce resources to achieve maximum satisfaction of human economic wants ECONOMICS

In other words the study of scarcity and choice In other words the study of scarcity and choice. Every economic issue involves, at its most basic level, individual choice—decisions by individuals about what to do and what not to do. ECONOMICS