Soc Scie Flashcards
According to blank, modern economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses (The Library of Economics and Liberty,
n.d.).
Lionel Robbins
According to blank, Economics is the study of how individuals and society choose, with or without the use of capital, to use finite productive resources that may have alternate uses, to create certain goods over time and to allocate them for use, now and in the future to different persons and classes in society (Kolmar, 2017).
Paul A. Samuelson
Economics was coined from the Ancient Greek word blank which means blank
oiknomia, “management of the household,
administration”
blank which means. It’s from the word oikos which means “house”, and nomos which means “custom and law”
(Mankiw, 2018).
oikonomos, “one who manages a household “
means that available resources are insufficient to satisfy all our wants and needs.
Scarcity
There are two branches of economics?
Macroeconomics and Microeconomics
- defines and discusses aggregate-related economic processes;
- explores aggregate behavior by imposing assumptions that are
simplified but without abstracting from the essential features. - These assumptions are used for the construction of
macroeconomic models (Kunst, 2006)
Macroeconomics
→ is an economic division that examines how individuals and firms
make choices about allocating scarce capital, usually in markets
where products and services are bought and sold.
→ Taking into account the shortage and policy intervention,
Microeconomics looks at transactions across individual markets
(Kolmar, 2017).
Microeconomics
→ is the type of Economics that focuses on describing, quantifying,
and explaining economic developments, expectations, and
related phenomena
→ relies on objective analysis of the data, relevant facts, and related
figures.
→ seeks to create some cause-and-effect relationships or behavioral
correlations that can assist in the ascertainment and testing of
economic theories
→ statements can be measured against tangible or historical
evidence. Positive economics have no instances of approval-
disapproval
Positive economics
→ The Wealth of Nations identified
land, labor, and capital as the
main production factors and major
contributors to the wealth of a
nation.
→ his book was described as the
beginning of economics as a
separately distinctioned discipline
in 1776.
→ The Invisible Hand Theory explains
that the ideal economy is a self-
regulating market structure that
meets the economic needs of the
population automatically.
→ He also embedded some of
Physiocrate ‘s ideas in his own
economic theories, including
laissez-faire, but rejected the idea
of only productive agriculture
(Blaug, 2017).
→ In classical theory , the theory of value was important. Smith wrote that,
as affected by its scarcity, “the real price of everything… is labor and
trouble obtaining it.”
Adam Smith
→ focuses in political opinions and value assessments, and
statements aimed at economic development , investment
projects and scenarios
→ Its goal is that the desire of individuals (or their lack of) is
summarized by asking or quoting different economic
developments and situations, and programs.
→ is subjective and value-based. It is based on a personal view,
sentiment or opinion involved in decision-making. The declarations
of regulatory economics are rigid and prescriptive in nature
Normative economics
→ First major work, Das Kapital,
was his first major work
published in 1867 in German.
→ Marx concentrated on the
importance of labor theory and
what he viewed as capital
exploitation. The value theory of
labor considered that the value
of a thing was determined by
the work involved in its
production. (Fuller, 2009).
→ Marxism is about sharing what
we each have in accordance
with our ability to meet their
needs. But, the goals can only
be achieved through forced
overthrow of all existing social
conditions, including religion,
families, personal property,
independence, and
democracy. All of these had to
go in order to fulfill Marx’s dream
of an earthly paradise.
Karl Marx
→ The book, The General Theories of
Work, Interest and Monetary
Affairs, which have opened up
contemporary macroeconomics
in a distinct field.
→ The book focuses on short-term
determinants of domestic income
when prices are relatively
inflexible. In its economic analysis,
words such as “revolutionary”
were added in the novel.
→ It focuses on the use of an active
government policy to manage
aggregate demand for
economic recessions or to
prevent them.
→ In response to the Great
Depression, Keynes developed
his theories and highly criticized
the classical economic
arguments which would provide sufficient natural economic forces
and incentives for the economic recovery (Chappelow, 2020).
John Maynard Keynes
→ The theory later referred to as
neoclassical economy or
marginalism was founded
between 1870 and 1910.
→ The term ‘economics’ has been
popularized as a concise
synonym for ‘economic science’
as a substitute for the previous,
broader term ‘political economy.’
This corresponded to the effects
on the subject of natural science
and mathematical methods.
→ One of his notable contributions
in his “Principles of Economics” is
that the price and output of a
good are determined by both
supply and demand.
→ Modern mainstream economics builds on neoclassical economics,
but it has several refinings that complement or generalize earlier
analyses such as econometrics, game theory, market failure analysis,
and imperfect competition, and the neoclassical model of economic
growth to analyce long-term national income variables (Clark, 1998)
Alfred Marshall
It
uses calculus, linear, statistical and computer science methods as well as
game theory.
Contemporary economics is also known as mathematical economics.
describes a simplified description of the relationship between two
or more variables. The aim it is to address and simplify a complex , real-world problem. A good theory is sufficiently simple to
comprehend and complex to capture the key characteristics of the
studied object or situation.
Theory
