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* The nature and importance of economics

* The economic models and the flow of production


- Greek word “oikosnamos” from “oikos - house” and “namos – custom or law” which means “rules of the house (hold for good management)”

- it’s the study of scarcity,

- the study of how people use resources,

- the study of decision-making


- essential for human survival

Kinds of Needs

* Basic needs

* Essential needs for descent and comfortable living

* Needs for luxury goods


- goods that give more satisfaction

Kinds of wants

* Private wants - Private is personal clientele and their personal needs such as jets, hotels, and restaurants

* Public wants - Public wants are governments costs, marketing, and such.


* Final users of produced goods and service satisfaction of their wants and need


* Use various resources in order to produce final goods and services.

Goal of economics

1. To strengthen economic freedom

2. To promote economic efficiency

3. To promote economic stability

4. To promote economic security

5. To attain a high level of growth in the economy

Economics as Related to Other Social Sciences

1. Anthropology

2. Political Science

3. Sociology

4. Psychology

5. History

Branches of Economics


- Deals with the behavior of individual components such as household


- Deals with the behavior of economy as a whole with the view of understanding the interaction between economic aggregates such as employment, inflation and national income.

Methodologies of Economics

Positive economics

-It deals with how the economy works

Normative economics

- It is an economic statement that makes recommendation to economic policy.

Scientific Method of Economics

The scientific method involves identifying a problem, gathering data, forming a hypothesis, testing the hypothesis, and analyzing the results. In...