Introduction to Economics (part 1)

Definitions of important introductory terminology. I suggest students to write them on flash cards and really get to terms with these terms. It always helps to throw in a technical term for essays and reduce the level of waffle. Time is short in exams, it also impresses examiners.

Social Science is a study of people and society and how the interact with each other.
Economics is the study of rationing systems and how scarce resources are allocated to fufill the infinite wants of consumers.

Microeconomics is the study of the behavior of markets, workers, households and firms and how they make economic decisions about the allocation of scarce resources.
Macroeconomics is the general study of the economy using information such as unemployment, inflation and price levels.

Economic growth is the real increase (inflation adjusted) of the goods and services produced in an economy. (caused by either increasing production capacity or quality and value of products)

Economic development is a measure of welfare and well being of people. E.g. level of education, health and environmental protection. (measured using indicators or composite indexes such as the Human Development Index [HDI])

Sustainable development is development that occurs without environmental degradation, non renewable resources are not used at a too fast rate. It is development that meets the needs of the present without compromising the ability for future generations to meet their needs and wants.

Positive economics are facts that can be tested and proven. It is objective knowledge.

Normative economics are opinion or beliefs that cannot be proven wrong or right. It is called value judgment and this is subjective knowledge.