WHAT IS ECONOMICS?

“THE ECONOMY IS A VERY SENSETIVE

ORGAN”
--HJALMAR
SCHACHT
• Robins definition:
• In his landmark essay on the nature of economics, Lionel Robbins defined economics as.
“the science which studies human behaviour as a relationship between ends and scarce
means which have alternative uses.”
• Production:
• the process in which various inputs, such as land, labor, and capital, are used to produce
the outputs in the form of products or services.
• Resources:
• There are four economic resources: land, labor, capital, and technology. Technology is
sometimes referred to as entrepreneurship. Natural resources that are used in the
production of goods and services. Some examples of land are lumber, raw materials, fish,
soil, minerals, and energy resources.
• Goods:
• In economics, goods are defined as items that satisfy human wants, provide utility or
usefulness, and are scarce (have limited availability). An economic good must also be
capable of being transferred from one person to another or produced and consumed.
• Services:
•  a service is an intangible commodity. More specifically, services are an intangible
equivalent of economic goods. Service provision is often an economic activity where the
buyer does not generally, except by exclusive contract, obtain exclusive ownership of the
thing purchased.
• Types of goods:
• Goods can be categorized into various types based on different criteria. Here are some common ways to classify
goods:
• Tangible Goods: These are physical products that can be touched, seen, and held. Examples include cars,
clothing, electronics, and food items.
• Intangible Goods: These are non-physical products that cannot be touched but have value. Examples include
software, patents, copyrights, and digital content.
• Consumer Goods: These are goods purchased by individuals for personal use or consumption. They can be
further categorized into:
• Durable Goods: Long-lasting items like appliances, furniture, and cars.
• Non-Durable Goods: Items that are used up relatively quickly, such as food, toiletries, and clothing.
• Capital Goods: These are goods used by businesses to produce other goods and services. They can include
machinery, equipment, buildings, and vehicles used in production.
• Intermediate Goods: These are products used in the production process but not sold directly to consumers.
They are often used as inputs in the manufacturing of other goods.
• Complementary Goods: These are goods that are typically used together because consuming one enhances the
consumption of the other. For example, smartphones and smartphone accessories like cases or chargers.
• Substitute Goods: These are goods that can be used in place of each other. When the price of one substitute
increases, demand for the other may rise. For example, butter and margarine.
• Free Goods: These are goods that are abundant and freely available, often without a price. Air and sunlight are
common examples.
• Public Goods: These are goods that are non-excludable and non-rivalrous, meaning that they are available to
everyone and one person's use does not diminish their availability to others. Examples include clean air, national
defense, and public parks.
• Private Goods: These are the opposite of public goods. They are excludable and rivalrous, meaning they can be
owned and consumed by individuals, and one person's use can reduce their availability to others.
• Club Goods: These are goods that are excludable but non-rivalrous. They are available to those who pay for
access but can be used by multiple individuals without diminishing their value. Subscription-based streaming
services are an example.
• Common-Pool Resources: These are goods that are rivalrous but non-excludable. They are often subject to
overuse or depletion when not properly managed. Examples include fisheries and forests.
• Factors mobilty:
• Factor mobility measures the extent to which factor inputs such as land, labour
and capital can easily switch between alternative uses with no loss of
efficiency.
• Occupation mobility:
• Occupational mobility refers to the ease with which a worker can leave one
job for another in a different field. When labor mobility is high, economists
predict a high degree of productivity and growth.
• Occupation immobility:
• Occupational immobility refers to the inability of labour to move from one
type of job to another. Occupational immobility is caused by insufficient
education, skills and training.
• Production possibility curve:
• The Production Possibility Curve (PPC), also known as
the Production Possibility Frontier (PPF), is a graphical
representation used in economics to illustrate the concept
of opportunity cost and the trade-offs that arise when
allocating limited resources to produce multiple goods
and services. The PPC demonstrates the maximum
possible output combinations of two goods or services
that an economy can produce, assuming that all resources
are fully and efficiently utilized.
• thank youu
• m.sarim khan
• 9-e