1. BASIC ECONOMICS
Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. (L.Robbins 1935)
Economics is the social science that examines how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants.
Wants - This is simply the desire of the citizens of a country. Each individuals wants are different and varies time to time.
Needs - These are basic requirements human must have in according to survive.
A need is something that you have to have. Want is something you would like to have
Scarcity - Is the fundamental economic problem of having seemingly unlimited human needs ...view middle of the document...
These are produced, bought, sold, and traded.
Consumer Goods - Goods that are intended for final use by the consumer.
Capital Goods - Goods used in the process of production of other goods.
Services - An Act by one person or group that benefits another. Services are intangible.
Durable Goods - Goods intended to use for a long period of time.
Non Durable Goods - Goods intended to use for a short period of time.
Consumers - People who use these Goods and Services
Value - An assignment of worth. The assignment is usually based upon the utility (usefulness) or scarcity of the item (supply and demand)
Paradox of Value - Assignment of the highest value to those things we need the least.
Wealth - The sum of collection of those economic products that are tangible, scarce and useful.
Productivity - The amount of output per unit of input. There are different ways of measuring productivity.
Demand for a product or service is defined as the quantity of that particular product or service consumers are willing to purchase.
◦ Factors that affect the demand for a product
← Price of the Product
← Income of the consumers
← Availability of product
← Alternative products
← Promotion of the product
The supply of a product is defined as the quantity of the product which producers or manufacturers are willing to produce and sell.
◦ Factors that affects the Supply of a product
← Price of inputs (Raw materials, Labor)
← Availability of Inputs
← Technology changes
← Government policies
← Natural influences
Voluntary association formed and organized to carry on a business in the legal name of the association (see company name).
In Australia, Canada, and the US, the term 'corporation' is preferred instead. Exist for:
◦ To provide a product or a service to final customer or to a business
◦ To make Profits to its owners/investors
Sole Proprietorship (self employed person)
A business structure in which an individual and his/her company are considered a single entity for tax and liability purposes.
Key Features of a Sole Proprietorship
← Owner has complete control over all business affairs.
← Simple to administer and operate. Trade license, tax statement.
← Long established business mechanism
← Usually starts with a small investment.
← No distinction between personal and business entities and therefore, no protection for one's own personal assets. There is no tax distinction between personal and business income, often leading to an inefficient use of potential tax savings.
← A Sole Proprietor is directly liable for the actions of his employees.
A business partnership is, featuring two or more...