What is Economics?
The study of economics is concerned with how countries use their resources to satisfy the needs and wants of different economic agents.
Resources are called Factors of Production
Land
natural
resources
raw materials
Labour human
resources
workers
Capital man made
resources machines
Enterprise individual
initiative
business people
The difference between a need and want:
Need: something which is essential for life, eg food
Want: something which improves the quality of life, eg holidays abroad
Economic agents will want to do the best for themselves
Individuals:
maximise the their own welfare (utility)
Workers: maximise pay and non pay rewards
Firms:
maximise profit
Government: maximise the welfare of the people
Economics is therefore concerned with examining how countries use their factors of production to meet the needs of different economic agents, and also improve the overall quality of these agents