Basics Of Economics

1. Basics Of Economics Prepared By: ShaikhMohseen

2. Economics is the study of how economic agents or societies choose to use scarce productive resources that have alternative uses to satisfy wants which are unlimited and of varying degrees of importance Introduction Prepared By: Shaikh Mohseen

3. Limited Resources Prepared By: Shaikh Mohseen

4. Economics assumes rationality on the part of its subjects like consumer, producer and seller. Rationality implies acting objectively, keeping in view the ends and means, the objectives and constraints. In the Decision-making context, a rational behavior implies the following: • First, all possible courses of action are known to you. • Secondly, you are able to separate all such courses of action into two categories – feasible and infeasible. • Thirdly, based on the available information, you are in a position to assess the consequences of following a particular feasible course of action out of a given set of alternatives. Fourthly, you can rank the alternatives in terms of priorities. • Lastly, you choose that course of action, which occupies the highest position in the order of priority. Economic Rationality Prepared By: Shaikh Mohseen

5. Every economy faces three fundamental questions in its functioning. These are: • What goods and services are to produce and in what quantity? • How to produce those goods and services? i.e. how the scarce resources are optimally allocated? and • How the goods and services so produced are distributed among the households? Alternative Economic Systems Prepared By: Shaikh Mohseen

6. To Be Continued……. Prepared By: Shaikh Mohseen