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    Basic Microeconomics Chapter 1 Notes

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    Basic Microeconomics Reviewer for Midterm Exam

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    Basic Microeconomics Chapter 1 Notes

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    Basic Microeconomics Reviewer for Midterm Exam

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    Basic Microeconomics Reviewer for Midterm Exam

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    10 views2 pages

    Basic Microeconomics Chapter 1 Notes

    Uploaded by

    Del Roman Peralta
    Basic Microeconomics Reviewer for Midterm Exam

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Basic Microeconomics Chapter 1 notes

    Definition of Economics
     Economics: The social science that deals with the allocation and efficient use of
    scarce resources to satisfy unlimited human wants.

    Scientific Method in Economics


    1. Define the problem: Identify the economic issue or challenge.
    2. Gather data: Collect relevant information.
    3. Analyze the data: Study the information to understand trends and patterns.
    4. Draw conclusions: Make informed decisions or recommendations based on analysis.

    Characteristics of Human Wants


     Unlimited: Human desires constantly grow.
     Insatiable: Impossible to fully satisfy all wants.
     Varied: Wants differ among individuals and cultures.

    Divisions of Economics
    1. Microeconomics: Focuses on individual units like consumers, firms, or industries.
    2. Macroeconomics: Studies the economy as a whole, covering issues like national
    income, inflation, and unemployment.

    Types of Goods
     Consumer Goods: Products used directly by consumers (e.g., food, clothing).
     Capital Goods: Used in producing other goods (e.g., machinery, tools).
     Essential Goods: Necessities for basic living (e.g., water, shelter).
     Luxury Goods: Non-essential items purchased for comfort or status (e.g., jewelry,
    high-end cars).

    Basic Economic Problems


    1. What to produce: Deciding the types and quantities of goods and services (e.g., food
    vs. clothing).
    2. How to produce: Determining the methods of production (e.g., manual labor vs.
    automation).
    3. For whom to produce: Deciding who will receive the goods and services based on
    income, preferences, or need.

    Value and Benefits


     Value: The perceived worth of a good or service based on the satisfaction (benefit) it
    provides to consumers.

    Economic Systems
    1. Market Economy (Capitalism): Decisions are made by individuals and businesses
    based on supply and demand.
    2. Command Economy (Communism): The government controls production,
    distribution, and pricing of goods and services.
    3. Mixed Economy (Socialism): Combines elements of both market and command
    economies, with both private and public control over resources.

    Key Concepts
     Scarcity: The fundamental economic problem where limited resources cannot satisfy
    unlimited wants.
     Efficiency: The optimal use of resources to achieve the maximum possible
    satisfaction of human wants.

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