PRINCIPLE OF ECONOMICS
Economics is a branch of Social Science that deals with production, distribution and consumption of goods and services. It tends to the management of scarce resources(Land, Labour, Capital ) in order to satisfy unlimited human wants. It study human behaviour in relationship to their needs, scare resources and atternative choices.
Economics problems can be solve in two different ways; Micro and Macro.
Micro Economic is a branch of economics that concentrate on behaviour of individuals consumer. And the firms in order to understand decision making process.
Macro Economic is a branch that focuses on the entirely economics as a whole e.g. inflation, unemployment, total output etc.
Terms and Problems
Scarcity: It arises as a result of unlimited human needs competing for limited resources. It means there is insufficient resources to meet demands.
Choice: Choice is the act of choosing or selecting among alternative. This is a major concept that arises because of scarcity.
Opportunity cost: This is a concept that establish relationship between scarcity and choice. It is a cost forgone in order to satify an alternative need
Problems of Economics
- What to produce (common commodities)
- How to produce
- For whom to produce (Target)
- How efficiently our resources are utilized
- Is economics growing or stagment
- Technology intensive is when we apply technology to produce goods or services,
- Labor intensive refers to a process or industry that requires a large amount of labor to produce its goods or services.
Every system is operated by structure Economy ststem is the combination of these agent i.e a capitalist economic system free enterprise.
Capitalist system (free Enterprise): This is an economic system where by the factors of production are owned by individual e.g. Private companies Like Dangote etc.
Capitalist Economic system: This is an economic system characterized by private individual ownership of all productive of assets factors of production. The main objective of this economcy system is profit maximization.
Socialist economic system: This is an economy that is centrally owned and controlled by the government and they determine the production of goods and services and price, and the main objective of this system is social welfare in order to ensure opportunity for all. Example of Country that practise socialist economic system are China, Cuba and North Korea
Mixed Economic system: In these form of economic system both the government and private own the factors of production but the government dominate essential sectors like health, education and security.