Economics: The Central Problem (Study of: (Resource allocation in an…
Economics: The Central Problem
Resource allocation in an economy
Production of G&S
By the economy
Amount by firms
Technique of production
Consumption of G&S
How much the population spends/saves
How many people buy an item
How consumption is affected by prices & other factors
Study of economic behavior of
Eg. How firms determine level of prod. & price of products.
Eg. examining the determinants of price of good in a market.
Study of economy-wide phenomena resulting from group decision-making.
Eg. studying aggregates like general price level, unemployment rate, and national income.
Types of economics:
Description and explanation of economic phenomena
Focuses on facts and cause-and-effect relationships