S1 ET DCM1107 Live

# Unit 1

Table of Contents

### April 5, 2026

## Course Objectives

A) Develop analytical skills for interpreting consumer decision-making and market behaviour using economic tools.
B) Examine cost and revenue structures of firms.

## Definition of Economics by various individuals

A) Wealth Definition by Adam Smith.
B) Welfare Definition by Alfred Marshall.
C) Scarcity Definition by Robbins.
D) Growth Defintion by Samuelson.

## Nature

### A) Economics as a Science

1. Positive (what is, based on data and logic)
2. Normative (what ought to be, opinions, judgements)

### B) Economics as an Art

1. Pure (what ought to be, ideals and goals)
2. Applied (real world, how to implement)

### A) Described Economics as a Science

1. Focuses on laws and cause-and-effect relationships (e.g Law of Demand).
2. Models to predict economic outcomes.
3. Data analysis, observation, hypothesis.
4. Real-world evidence.
5. Deductive and Inductive reasoning.

- Limitaion: Human behaviour involved.

## Methods

A) Inductive (specific -> general).
B) Deductive (general -> specific).

### A) Inductive

1. Real-world observation, identify problem.
2. Collect data, analyze and find patterns.
3. Formulate and test generalisations.

### B) Deductive

1. Identify the general problem.
2. Assumptions, formulate hypothesis.
3. Verify using data.