ECONOMICS NOTES

CONTENT
1. THE ECONOMIC PROBLEM
2. THE ECONOMIC ASSUMPTIONS
3. THE DEMAND CURVE
4. FACTORS THAT MAY SHIFT THE DEMAND CURVE
5. THE SUPPLY CURVE
6. FACTORS THAT MAY SHIFT THE SUPPLY CURVE
7. MARKET EQULIBRIUM
8. PRICE ELASTICITY OF DEMAND
9. PRICE ELASTICITY OF SUPPLY
10. INCOME ELASTICITY
11. THE MIXED ECONOMY
12. PRIVATISATION
13. EXTERNALITIES
14. THE FACTORS OF PRODUCTION AND SECTORS OF ECONOMY
15. PRODUCTIVITY AND DIVISION OF LABOR
16. BUSINESS COST,REVENUES AND PROFIT
17. ECONOMIES AND DISECONOMIES OF SCALE
18. COMPETITIVE MARKETS
19. ADVANTAGES AND DISADVANTAGES OF LARGE AND SMALL FIRMS
20. MONOPOLY
21. OLIGOPOLY
 CHAPTER 01-THE ECONOMIC PROBLEM
 Good are the things that are produced in order to be sold.
 All the countries have resources such as water, minerals, soil, plants etc. However in some
countries there is a finite quantity of these countries which means in some countries these
resources are available in a limited quantity. As these are resources are in limited quantity
economists call these resources as finite resources.
 Ex-In some African countries there is a serious shortage of fertile soil and water
 And these resources are often referred to the four factors of production-land, labor, capital and
enterprise.

 Economists distinguish between needs and wants.

 Needs are the basic requirements for human survival. Ex-
 If these needs cannot be satisfied humans will cease to exist.
 In addition to needs are the wants-Wants are people’s desires for goods and services and wants
are infinite which means they are unlimited. Ex-a better house, a big car etc...

 All countries have to deal with what the economists call the BASIC ECONOMIC PROBLEM.
 This means the allocation of nation’s scarce resources between competing uses that represent
infinite wants so decisions have to be taken