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 #
- Positive (what is, based on data and logic)
- Normative (what ought to be, opinions, judgements)
B) Economics as an Art #
- Pure (what ought to be, ideals and goals)
- Applied (real world, how to implement)
A) Described Economics as a Science #
- Focuses on laws and cause-and-effect relationships (e.g Law of Demand).
- Models to predict economic outcomes.
- Data analysis, observation, hypothesis.
- Real-world evidence.
- Deductive and Inductive reasoning.
- Limitaion: Human behaviour involved.
Methods #
A) Inductive (specific -> general).
B) Deductive (general -> specific).
A) Inductive #
- Real-world observation, identify problem.
- Collect data, analyze and find patterns.
- Formulate and test generalisations.
B) Deductive #
- Identify the general problem.
- Assumptions, formulate hypothesis.
- Verify using data.