DEPARTMENT OF COMMERCE
FIRST YEAR STUDENTS
MODULE: ENGLISH
SECTION: C1/C2
Introduction to Economics
What is Economics?
Economics is a social science that focuses on the production, distribution, and consumption of goods and
services. The study of economics is primarily concerned with analyzing the choices that individuals, businesses,
governments, and nations make to allocate limited resources.
What are the two branches of Economics?
1.Microeconomics: focuses on the choices of individuals and businesses.
Microeconomics studies how individual consumers and firms make decisions to allocate resources. Whether a
single person, a household, or a business, economists may analyze how these entities respond to changes in
price and why they demand what they do at particular price levels.
Microeconomics analyzes how and why goods are valued differently, how individuals make financial
decisions, and how they trade, coordinate, and cooperate.
Within the dynamics of supply and demand, the costs of producing goods and services, and how labor is
divided and allocated, microeconomics studies how businesses are organized and how individuals approach
uncertainty and risk in their decision-making.
2.Macroeconomics: concentrates on the behavior of the economy on an aggregate level.
Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a
whole. Its primary focus is recurrent economic cycles and broad economic growth and development. It focuses
on foreign trade, government fiscal and monetary policy, unemployment rates, the level of inflation, interest
rates, the growth of total production output, and business cycles that result in expansions, booms, recessions, and
depressions. Using aggregate indicators, economists use macroeconomic models to help formulate economic
policies and strategies.
What is the differences between microeconomics and macroeconomics?
Economics is divided into two categories: microeconomics and macroeconomics. Microeconomics is the
study of individuals and business decisions, while macroeconomics looks at the decisions of countries and
governments.
Though these two branches of economics appear to be different, they are interdependent and complement one
another. Many overlapping issues exist between the two fields.
What is the role of economists?
An economist studies the relationship between a society's resources and its production or output, and their
opinions help shape economic policies related to interest rates, tax laws, employment programs, international
trade agreements, and corporate strategies.
Economists analyze economic indicators such as gross domestic product and the consumer price index to
identify potential trends or make economic forecasts.
What are the Five economic systems?
. Primitivism: Is an underdeveloped economy in which communities use primitive tools and methods to gather
and hunt for food, often resulting in little economic growth. Also, they use traditional method, limited use of
technology and simple means of production.
. Feudalism: A political and economic system of Europe from the 9th to 15th century, feudalism was defined by
the lords who held land and leased it to peasants for production, who received a promise of safety and security
from the lord.
. Capitalism: is an economic and political system in which a country’s trade and industry are controlled by
private owners for profit. It means that production are held by private individuals or organizations, not the
government, and the distribution of goods are determined mainly by competitions in a free market.
. Socialism: a political and economic system in which property and the means of production are owned in
common, typically controlled by the state or government. Socialism in other meaning is to create equality
between people and is a system of production in which there is limited or hybrid private ownership of the means
of production.
. Communism: is the opposite of capitalism, it means that everything in controlled by the state, there are not
private organizations. in other meaning under communism all productive enterprises are owned and controlled
by the state or government.
Who Has Influenced the Study of Economics in the 21st Century?
Since 2000, several economists have won the Nobel Prize in economics, including David Card for his
contributions to labor economics, Angus Deaton for his study of consumption, poverty, and welfare, and Paul
Krugman for his analysis of trade patterns.
