FUNDACION UNIVERSITARIA TECNOLOGICO COMFENALCO

SUBMITTED BY:

ANDREA VALENCIA BETANCOURT

JAJAIRA PERTUZ PEREZ

NICOLAS SOTO MONTALVO

INDUSTRIAL ENGINEERING

ECONOMIC FUNDAMENTALS

CARTAGENA DE INDIAS D.T. Y C.

2021
1. The principles on which economic science is based, according to the relationship
established by Professor Gregory Mankiw, are as follows:
 All economic agents must face trade-offs and decisions As there is a resource
constraint as well as unlimited needs, agents must choose how to maximise and
make efficient use of these resources.
 Every decision has an opportunity cost This refers to the fact that, when we make a
decision, there is always a counterfactual scenario that we fail to choose when we
choose the other. However, there is a cost or benefit to this decision.
 Marginal analysis and rational thinking Economic agents base their decisions on
marginal profit and cost. In this way, economic operators base their decisions on the
benefits and costs of manufacturing an additional unit.
 Economic agents mobilise on the basis of incentives All economic agents base their
behaviour and behaviour on rewards which we call incentives.
 Trade as an improvement in welfare This principle refers to the fact that trade
ultimately leads to an improvement in welfare, since more goods and services are
produced which, directly or indirectly, offer us a greater variety of resources.
 Markets organise economic activity efficiently This refers to the fact that, as Adam
Smith said, the market is the best existing control of the economy. However, many
economists claim that this market suffers distortions, or what we know as "market
failure". to this end, they advocate the intervention of the State to correct these
failures.
 Governments can improve well-being through the rule of law, the improvement of
equity and the promotion of efficiency A series of economic policies should be
adopted that seek to promote that more equitable situation.
 The standard of living of the citizens of a country depends on the capacity of the
country to produce goods and services In this sense, the more a country produces,
the more its level of economic growth increases. Thus, it is understood that the
greater growth, greater resources and, consequently, greater well-being.
 Prices soar with the increase in the money supply and the fiscal deficit In this sense,
it is referred to that printing more currency produces inflation, in the same way that
a high fiscal deficit produces it.
 In the short term, full employment and moderate inflation are opposite decisions.
For this reason, both elements cannot be given simultaneously.
 1. The main economic schools are:
 Old and Medieval Economy.
 Salamanca School.
 Mercantilist School.
 Physiocracy.
 Classical School.
 Neoclassical School.
 Marxism.
 Austrian School.
Economic elements: correspond to all components that affect or influence the economy
and its development. Goods, services, markets and consumers are some vital elements and
concepts in the economy. Because of the interaction between them, an economic system
can be sustained over time.
Economic events: are the most important events that cause the company’s accounts to
vary. In some cases, they are called accounting events. Unlike accounting records ,
economic events are events such as a purchase, a sale or a record of a loan or a possible
expense.
Economic act: Manifestation of the human will aimed at satisfying their needs through
conscious deeds. That is, when man becomes aware of his needs and how to satisfy them,
then he performs economic acts
Economic activities: are those that produce goods and services through the production and
processing of raw materials into products available for sale.
Economics: is a social science that studies how to manage the resources available to meet
human needs. In addition, it also studies the behavior and actions of human beings.
Economy as a Historical Science: Since economy has been a creation of man for several
centuries, it and history have a close relationship, since everything has its antecedents and
is also a social science, This always goes hand in hand with man and his history in society.
The objective current of economics differs from its counterpart, the subjective current,
in that the former approaches the process of knowledge according to dialectical logic, while
the latter uses formal logic.
Economic laws: Laws that govern the production, distribution, change and consumption of
material goods in the different stages of development of human society. They express the
most essential, stable, causally conditioned links and relations between the phenomena and
processes of the economic life of society.
The microeconomics study the behaviour of consumers and businesses. The
Macroeconomics studies the economy as a whole, and analyzes aggregates. The variables
usually studied by the macroeconomy are the level of national income, consumption,
savings, investment, inflation, the exchange rate.
The agricultural (or agrarian) economy is a branch of the economy that aims to study the
agricultural sector, as well as its relations with the rest of the economic system.
The Industrial Economy: is that part of the economy that studies the formation of prices
in imperfect markets and in conditions of partial equilibrium. The industrial economy
analyses the interdependencies of enterprises within markets.
The national economy is a set of sections of the production and labor of a country, which
includes construction, agriculture, industry, the credit system, transportation, among other
sectors responsible for producing income to the country during its production.
The purpose of the international economy is to study the economic movements of a
country in relation to the rest of the world, which may be of a wide variety of kinds:
commercial, financial, technological and tourist, among others, especially from the
macroeconomic point of view.
The economy and its relationship with the field of engineering Knowledge about
production costs, demand behavior, pricing and project evaluation, allows the professional
to optimize their efforts and make more focused contributions to the benefit of the
organization in which they work.
To begin with, the different schools of economic thought that study the history of
intellectual efforts to understand and explain economic phenomena are called
Currents of Economic Thought.