hyzendust.github.io/content/uninotes/et-dcm1107-unit1/live.md

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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.