Class notes
Introduction to Economics
- Course
- Introduction to Economics
- Institution
- McGill University (Mcgillu)
This pdf file contains notes on Introduction to Economics, Macroeconomics, Microeconomics, and human wants.
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INTRODUCTION TO ECONOMICSIntroduction to Economics
Economics is a social science that studies the allocation of scarce resources which have alternative uses
among competing and usually limitless wants of the consumers in the society. It is thus concerned with
the way people apply their knowledge, skills and effort to the gift of nature to satisfy humans’ material
wants.
It is also defined as the study of how human beings strive to satisfy their unlimited wants using limited
resources.
Basic Economic Concepts
1 HUMAN WANTS.
These are basic needs that human beings need to function normally. These include; food, shelter,
clothing, and air. Things like radio, education, watches, and vehicles are not very basic. They are meant
to have an individual have a happy and comfortable and luxurious life.
• Form utility-This is created by changing the form of raw material to a finished product. It is
usually done during various manufacturing processes. The finished goods are in a better form
for use than the raw materials.
• Time utility-this is created through warehousing or storage
• Possession utility-This is created through trade or exchange.
• Place utility-this is created through distribution. After goods have been produced, they must be
moved to the places where they are required for use.
Characteristics of human want.
• They are many, numerous, and unlimited.
• They continually change with time and other factors.
• Some are repetitive e.g., supper, lunch, etc.
• Wants are competitive
• Wants are complementary-Used together e.g., shoe polish and a shoe.
• Wants are habitual in that they always occur e.g., toothpaste, perfume, etc.
• Wants are universal-Everybody wants them.
Characteristics of basic wants.
• One can’t do without them.
• They are felt needs
, • Can’t be postponed
• They are satisfied before secondary wants.
Difficulties in satisfying human wants.
Although human wants are there to satisfy a man with lives requirements, it is not always possible to
have them this is because;
• They are too many and new ones keep cropping up.
• Resources to satisfy them are never enough (limited).
• They are repetitive hence people will always strive for more resources.
• They continually change with time and other factors like age and gender.
• Some are habitual making life unbearable without them.
• Due to scarcity of resources, a problem of deciding which want to satisfy first with scarce
resources arises.
Types of human want.
They are classified into two groups.
1. Basic human needs-This are things one cannot do without e.g., food. They always come at the
top on the scale of preference and failure to satisfy them one can lead a miserable life or even
die.
2. 2. Secondary human wants-they are things one cannot do without. They help one lead a happy
meaningful and comfortable life e.g., TV sets, radio, cars, education, sodas, etc.
NB.one must satisfy basic needs before attaining secondary wants.
Since the resources to satisfy human wants are scarce, one has to select what wants are to be satisfied
first and which can wait.
2 Economic Resources - These are ingredients that are available for providing goods and services to
certify human wants. A resource must be scarce and have a monetary value.
Characteristics of economic resources.
1. They are scarce in relation to their uses
2. They have a monetary value.
3. They have alternative uses.
4. They are unevenly distributed
5. They have utility
6. Can be combined to produce goods and services. They are transferrable from one place to
another.
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