Economics Notes

Our deires are unlimited, but resources are scarce
Our desires are unlimited but our pocket money is scarce (limited). Similarly, Goods are scarce, because economy of a country can produce a limited amount of goods, but people desire much more than the economy can produce. This is the basis of economics.

Definition of Economics
Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people.

Since, resources are limited, and our wants are unlimited, it is important that an economy make the best use of limited resources. It brings the important term of "Efficiency".

Efficiency
Efficiency denotes the most effective use of a society's resources in satisfying people's wants and needs.

Needs
Needs are those commodities, which are essential for our sustenance, like, peace, food, clothes, home, transport etc.

Wants
Wants are those commodities which are NOT essential, but we like to have with us, like, food at restaurant, new car, entertainment etc.

Division of Economics Subject
The subject of Economics can be divided in:

  • Microeconomics
  • Macroeconomics

Microeconomics:
The branch of Economics, which deals with the behaviour of individual entities such as markets, firms, and households.

Macroeconomics
The branch of Economics, which deals with the overall performance of the economy.

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