Intro To Economics: by Mr. D

LECTURE 1
Intro to Economics
by
Mr. D
KEY
TOPICS
• The economy COVERED
• The purpose of the economy
• The economy and economics
• How we measure the economy
• Characteristics of a good economy
What is Economics?
“Economics is concerned with how society sets about meeting
people's demands for things they want to consume.
It looks at the production, consumption and sale of goods

and services, both at the level of individual products, firms and
consumers and at the level of the total production and
consumption by countries.
It also compares alternative ways of using the limited resources

that countries and individuals possess and considers how
efficient and/or fair such alternatives are.”
What is the ECONOMIC PROBLEM
Needs vs. Wants

Free Goods
SCARCITY
Resources
ADDITIONAL KEY
TERMS INTRODUCED
• goods • innovation
• services • choice
• work • equality
• consumption • sustainability
• investment • democracy
• finance • accountability
• environment • capitalism
• GDP production for profit
• economic growth • wage labour
• prosperity
• security
WHAT IS THE ECONOMY, ANYWAY?
WHAT IS THE
ECONOMY, ANYWAY?
• The “economy” is simply that four-letter word that we

curse on Monday mornings: W – O – R – K
• The economy is the sum total of the work we must
perform to produce the goods and services we need
to survive and live.
• Without work (broadly defined as “productive
human effort”), nothing happens in the economy.
THE ECONOMY IN
YOUR NEIGHBOURHOOD
• You can identify the main ingredients of the economy walking
around your neighbourhood.
• Take a walk, and keep track of what you see:
• What work are people doing (paid & unpaid)?
• What do people consume, in order to stay alive/survive?
• What is being invested – is enough output ploughed back
into improving or expanding the local economy?
• How do people finance their bills? Where do they get
money?
• Is the local environment healthy, or being degraded?
• This is the “economics of everyday life.”
• We can ALL learn enough about economics to be confident
in questioning conventional wisdom, and defending our
interests
THE PURPOSE OF THE ECONOMY:
MEETING HUMAN NEEDS
• The “economy” is the sum total of human work.

• Why do we work? Because we are living beings, and
we must work to produce the things we need to stay
alive.
a) The requirements of subsistence.
b) But we want more: a full, quality, enjoyable life.
• We work to meet human needs.
• An economy that does not meet human needs, is not
doing its job very well.
• There’s nothing more “fundamental” about an
economy’s performance, than whether human
needs are being met.
WHAT WE PRODUCE
• Goods: tangible products that we can touch.
• Examples: houses, cars, clothes, food, equipment.
• Services: functions we perform for other people.
• Examples: restaurant meals, education,
telecommunications, health care, transportation,
entertainment, accounting.
• We need both goods and services.
• Services are growing as a share of total output
(about 70% of GDP today).
• Both goods and services are produced with the
same ingredients: productive effort (“work”,
aided by tools), and raw materials (harvested
from nature).
WHAT IS ECONOMICS?
• Economics is a social science.
• How we work, and what we do with the fruits of our
labour.
• Microeconomics: the study of individual firms &
consumers.
• Macroeconomics: how these players interact in
aggregate.
• Economics has never been value-free.
• Economists don’t just describe the economy.
• They have views about how it should function.
• Economics is not static.
• It evolves to reflect changes in the economy, and
debates and conflicts over the economy.
EVALUATING THE ECONOMY
• The reason we work is to produce the goods and services
we need to stay alive and get the most out of life.
• An economy functions well if it does that.
• Evaluating economic performance depends on the criteria
chosen.
• Evaluation must be broader than just “growing GDP.”
• Different individuals, communities, and classes will have
different criteria.
CRITERIA FOR EVALUATION
1. Prosperity: Do people have a good standard of living?
2. Security: Do people face risks of economic loss or
dislocation?
3. Innovation: Do people continually improve their work to
become more effective and productive? Are they
creative?
4. Choice: Do people have the ability to make major
economic choices (careers, consumption)?
5. Equality: Are there large differences between the living
standards and opportunities of different groups?
6. Sustainability: Does the economy continually degrade the
natural environment?
7. Democracy & Accountability: Are economic outcomes
subject to collective choices and oversight?

Intro To Economics: by Mr. D

Uploaded by

Copyright:

Available Formats

Intro To Economics: by Mr. D

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Intro To Economics: by Mr. D

Uploaded by

Copyright:

Available Formats

LECTURE 1

It looks at the production, consumption and sale of goods

It also compares alternative ways of using the limited resources

Needs vs. Wants

• The “economy” is simply that four-letter word that we

• The “economy” is the sum total of human work.

You might also like