Class 8 Economics ( Chapter 1 , Part 1)
- 2. ECONOMICS
- 4. OUTLINE OF THE LESSON
- 5. In this chapter you learn : • The meaning of Economics and basic concepts of Economics • The importance of studying Economics • Identify economic activities through narrating the basic economic problems. • The difference between Micro economics and Macro economics.
- 6. Meaning and Importance of Economics • “Economics is defined as the social science that examines how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants.” • “Economics is the study of wealth” - Adam Smith (1776) (Father of Economics) • “Economics is the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses.” - Lionel Robbins (1932)
- 7. Meaning and Importance of Economics • “Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people.” - Paul A. Samuelson (1948) • Economics is the study of people in the ordinary business of life.” - Alfred Marshall (1890)
- 8. Therefore, scarcity and choice are basic problems which everyone faces and which are the central problems of Economics.
- 10. The Production Possibilities Frontier
- 13. NEED WANT
- 14. NEED WANT
- 15. What are the things we use on daily basis ?
- 16. GOODS
- 17. WHAT ARE GOODS ? • Goods are the physical and tangible objects like food, clothes, book, bicycle, phone, TV, etc.
- 18. EXAMPLES
- 19. Service
- 20. What is service ? • Services are intangible things that are also required for our use. The common services used are electricity, transportation, education, medical care, tailoring, music, mobile and internet service, etc.
- 21. EXAMPLES
- 22. Who use goods and services?
- 23. Who are we ? People using goods and services are called the ‘consumers’.
- 24. Who are producers? • People engaged in the production of the goods and services are called the ‘producers’.
- 26. How does these goods and services reaches to the ultimate consumers?
- 27. Distributors
- 28. These goods and services are made available to us at our place through transporters, traders and shop keepers, who are called the ‘distributors’
- 30. How do we buy the required goods and services?
- 32. We buy the required goods and services by paying the given ‘price’.
- 33. How do we get money?
- 34. We are engaged in work or we are employed. By virtue of the ‘employment’, we get ‘income’.
- 35. What is the role of our government?
- 36. • ‘Government’ is responsible for maintaining law and order and providing some common basic facilities
- 37. Good roads, electricity, internal and external security. The government imposes ‘taxes’ for the goods and services it provides. EXAMPLES
- 39. How will a rational consumer allot Rs. 20 ?
- 41. • The word “economics” comes from the Greek words “oikos,” meaning “household,” and “nomos,” meaning “management”. Thus, economics refers to the art of “household management”
- 42. What is an economy ?
- 43. • An economy is the large set of inter- related production and consumption activities that aid in determining how scarce resources are allocated.