ECONOMICS LECTURE NOTES | ECONOMICS QUICK REVISION NOTES
Our desires are unlimited, but the resources are limited. This is the basis of the subject of Economics [•••]. Thus, Economics is the study of how societies use scarce (or limited) resources to produce valuable commodities and distribute them among different people [•••]. The subject of Economics is mainly divided in two branches: Microeconomics and Macroeconomics [•••].
The three fundamental problems of economic organization that every society has to face and must resolve are what, how, and for whom. That is,
- What commodities are produced and in what quantities
- How these goods are made, and
- For whom they are produced.
There are three forms of economy: (1) A market economy where individuals and private firms make decisions about production and consumption, (2) A command economy where government makes decisions about production and distribution, and (3) Mixed economy which is the combination of the above two forms of the economy of a country. Majority of the countries have mixed form of economy [•••]. A nation uses inputs (land, labor, and capital) to produce outputs. The three inputs (land, labor, capital) are also called factors of production [•••].