Economics Definition: Economics is a social Science dealing with the Economic Problem. •
Social: Science that deals with human beings.
Dealing: Means facing and not solving.
Economic Problem: The problem of Scarcity (The inability to satisfy all the needs & wants)
Economics is giving us the rules of rationality; the ability of taking rational decisions.
Economics studies the behavior of the government at the macro level.
Micro Economics: It studies the individual choices regarding how firms & organizations’ reactions affect the market.
Macro Economics: It deals with the whole economy that the government uses to improve their performance.
Law of Demands: When prices increased, demand decreased and when prices decreases the demand increases. However, when the product is inelastic and one need it urgently, no matter how much the product’s price is raised, the person is going to get it anyways.
The Economic Problem
The Economic problem can be defined as: The inability of a human being (whether rich or poor) to satisfy his/her human needs. The Economic problem is mainly based on two factors, which are: (Unlimited)
NEEDS & WANTS
-Needs: The very basic biological requirements to keep people alive (surviving). In other words, Needs are defined to be what is enough to keep people above the Subsistence Level (Food, Clothes and Shelter)
-Wants: Is considered to be the main reason for the Economic Problem (Ex: Mobiles are basic social requirements)
-Resources: At all levels (micro or macro, rich or poor), resources are always limited or scarce when they are compared to Needs & Wants.
-At any level, when resources increases, we immediately as human beings will start looking for something higher or better (higher needs & wants)
When we start (as people or as countries or as governments), we have to start with Needs.
Poverty Definition: Those who are below the subsistence level.
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