Reasons in Studying Economics:

1.To learn a way of thinking.

1.a. Opportunity Cost
1.b. Marginalism
1.c. Efficient Market
2. To understand society
3. To understand global affairs
4. To be an informed voter

Scope of Economics:
1. Microeconomics
2. Macroeconomics

Methods of Economics:
1. Positive Economics
2. Normative economics
3. Descriptive economics
4. Economic theory

Cautions and Pitfalls in Economics:

1. Post hoc, ergo propter hoc fallacy
2. Fallacy of composition

Structure of an Economic system:

1. Households
2. Business Firms
3. Financial Institution
4. Foreign Sector
5. Government

Criteria for judging economic outcomes:

1. Efficiency
2. Equity
3. Growth
4. Stability

The economic problem:

1. What to produce
2. How much to produce
3. How to produce
4. For whom to produce
Reasons in Studying development economics:
1. Understand the meaning of development
2. How to achieve economic growth
3. Permits us to learn historical records if economic progress
5. It allows us to comprehend the role of women
6. It aids us in knowing whether or not rapid population growth threatens economic
progress.
7. It allows us to learn the reason why there is so much unemployment
8. It assists us in determining whether or not third world educational systems promote
economic development.
9. I t also teaches us the meaning of sustainability
10. It aids us in understanding the impact of foreign debt problems.
11. It makes us understand the meaning of economic aids from rich countries and the
impact of the same.
12. It permits us to perceive the concept of globalization and international trade.

Core Values of Development:

1. Sustenance
2. Self-esteem
3. Freedom from servitude

Objectives of development:
1. To increase the availability and widen the distribution of basic life sustaining goods.
2. Raise levels of living
3. To expand the range of economic and social choices.

Theories of development:
1. Linear Stages theory
1.a. Traditional society
1.b. Pre-conditions for take-off into self-sustaining growth
1.c. The take off
1.d. The drive to maturity
1.e. The age of high mass consumption.
2. Structural changes model.
3. International dependence theory
3.a. Neocolonial dependence model.
3.b. False Paradigm model
3.c. Dualistic development model
4. Neoclassical counterrevolution theory
4.a. Free market analysis model
4.b. Public choice model
4.c. Market friendly model
5. New growth theory
Factors of economic growth:
1. Capital accumulation
2. Growth in population
3. Technological Progress
3.a. Neutral technological progress
3.b. Capital saving technological progress
3.c. labor saving technological progress

Characteristics of modern economic growth:

1. The sustained rise in national output
2. Advancing technology
3. To realize the potential growth inherent in new technology

(Kuznets 6 characteristics)
1. High rates of growth per capita output and population
2. High rates of increase in total factor productivity
3. High rates of structural transformation
4. High rates of social and ideological transformation
4.a. Rationality
4.b. Economic Planning
4.c. Social and economic equalization
4.d. Improved Institutions and attitudes
5. The propensity of economically developed countries to reach out to the rest of the
world for markets and raw materials.
6. The limited spread of this economic growth to only a third of the world’s population.

Classifying countries in the context of development:

UN:
1. Least developed
2. Developing
3. Developed

World Bank:
1. Low income
2. Middle income
3. Upper middle income
4. High income

United Nations Development Program (UNDP):

1. High
2. Medium
3. Low
Organization for economic cooperation and development (OECD):
1. Low income countries
2. Middle income countries
3. New industrializing countries
4. Members of the OPEC

Structural Differences of Developing Economies:

1. Geographic area, Population and income
2.Its historical and colonial BG
3. Its endowments of physical and HR
4. Its ethnic and religious composition
5. The relative importance of its public and private sectors
6. The nature of its industrial structure
7. Its degree of dependence on external economic and political forces
8. The distribution of power and the institutional and political structure within the nation.

Common Characteristics of Developing Countries:

1. Low levels on living
2. Low levels of productivity
3. High rates of population growth
4. High and rising levels of unemployment
5. Substantial dependence on agricultural production
6. Prevalence of imperfect markets
7. Dependence and vulnerability in international relations