Economics

It is the allocation of scarce resources among the alternative ends to meet unlimited needs.

Resources / Factors of Production

• Land
• Labor
• Capital
  • Equipment and infrastructure
• Entrepreneur / Enterprise
  • Risk takers
  • Creative head
  • People with novel ideas
  • Financed by someone else
  • They bring the IDEA

Basic Questions

• What to produce?
  • Needs and wants
• When to produce?
  • According to season
• For whom to produce?
  • Price / Affordability

Economic Models

• Simplified versions of reality to explain the complex situation
  • $Qd = a - bp$

Positive Economics and Normative Economics

• Facts and figures in positive economics
• Government should work to remove poverty (normative policy)
• Words like should / must / ought to in normative policy
• Policy economics
  • A course of action that is intended to influence or control the behavior of the economy