UNIT 1

INTRODUCTION
INTRODUCTION

ECONOMICS
Economics studies how
man utilizes his limited
resources for the
satisfaction of his
unlimited wants
MICROECONOMICS
Microeconomics is a study of how individual
economic units, firms, households and
industries make economic decisions, that is,
make choices.

MACROECONOMICS
Macroeconomics studies the behavior of the
economy as a whole.
WHAT IS AN ECONOMY?
Economy means the whole collection of production units
operating in a defined area or region by which people of that
area earn their living
 FUNCTIONING OF AN
ECONOMY

INVESTMENT
CONSUMPTION

PRODUCTION

EXCHANGE
DISTRIBUTION
ECONOMIC PROBLEM

CAUSES OF ECONOMIC PROBLEM

1. UNLIMITED WANTS

2. LIMITED RESOURCES

3. ALTERNATIVE USES OF RESOURCES

CENTRAL PROBLEMS OF
AN ECONOMY