This document provides an overview and learning objectives for a lesson on economic development. It defines key economic concepts like scarcity, resources, and production possibilities. The production possibilities curve illustrates the tradeoffs between producing different levels of two goods based on scarce resources and seeks to maximize output. It shows the production frontier and opportunity cost of choices. Economic growth can occur through improving resources and technology.
This document provides an overview and learning objectives for a lesson on economic development. It defines key economic concepts like scarcity, resources, and production possibilities. The production possibilities curve illustrates the tradeoffs between producing different levels of two goods based on scarce resources and seeks to maximize output. It shows the production frontier and opportunity cost of choices. Economic growth can occur through improving resources and technology.
This document provides an overview and learning objectives for a lesson on economic development. It defines key economic concepts like scarcity, resources, and production possibilities. The production possibilities curve illustrates the tradeoffs between producing different levels of two goods based on scarce resources and seeks to maximize output. It shows the production frontier and opportunity cost of choices. Economic growth can occur through improving resources and technology.
This document provides an overview and learning objectives for a lesson on economic development. It defines key economic concepts like scarcity, resources, and production possibilities. The production possibilities curve illustrates the tradeoffs between producing different levels of two goods based on scarce resources and seeks to maximize output. It shows the production frontier and opportunity cost of choices. Economic growth can occur through improving resources and technology.
In this lesson you will learn about the intricacies of economics, its definition and objectives, the meaning of scarcity, and its connection with economics.
Learning Objectives:
After successful completion of this lesson, you should be able to:
• Define economics and identify its objectives; • Define resources and enumerate its types; • Identify scarcity and its connection with economics; • Understand production possibilities including the assumptions in examining it; • Recognize the concept and terms under economics and distribution; • Differentiate economic efficiency and economic equity; • Identify and understand the different market failures.
Course Materials:
Unit 1: Introduction to Economic Development
• Economics is a social science concerned with the production, distribution, and
consumption of goods and services. • Resources is the basis for producing the food, shelter, medical care, and luxury goods. There are three types of resources namely: a) Natural Resources – raw materials b) Capital Goods Resources – machineries, equipment, building etc. c) Human Resources – labor • Scarcity is when the means to fulfill ends are limited and costly.
The essential problem of economics:
The allocation of limited means to fulfill
unlimited wants and needs. PRODUCTION POSSIBILITIES PRODUCTION POSSIBILITIES CURVE
This shows the maximum amounts This shows the alternative
of two different goods that can combination of maximum quantities. possibly be produced during any particular time period using society’s Important concepts illustrated by scarce resources. production possibilities curve:
Assumptions in examining production possibilities
• There is some limit to what we can
produce. ✓ All available resources are used Opportunity cost – the best fully. alternative that is forgone to ✓ All available resources are used produce or consume something efficiently. else. ✓ The quantity and quality of available resources are not • Unemployment changing during our period of • Economies may grow, and the analysis. variables that we assumed are ✓ Technology is not changing during unchanging certainly do change our period of analysis. over time. ✓ We can produce only two goods Economic growth – may occur if the with our available resources and quality or quantity of society’s resources increases due to different technology. factors such as technology development. It causes an outward shift of the entire production possibilities curve.
FUN FACTS ABOUT PRODUCTION POSSIBILITIES CURVE:
• The curve is a constraint because it shows the limit of attainable outputs.
• Points on the curve are attainable if the economy uses all of its resources i.e. full employment. • Points inside the curve are attainable but are less than ideal and do not reflect full employment i.e. under employment. • Points beyond the curve are unattainable, because there are not enough resources. OTHER TERMS AND COMBINATIONS OF GOODS FOR PRODUCTION POSSIBILITIES:
➢ Services - type of economic activity that is intangible, is not stored and does not result in ownership
➢ Staple goods (x-axis) and luxury goods (y-axis)
➢ Agricultural goods and manufactured goods
➢ Consumer goods (goods that are purchased by consumers) and capital goods (goods that are used to produce other goods)
➢ Military goods and civilian goods
➢ Private goods (goods provided by businesses) and public goods (goods provided by the government).
References International Monetary Fund, World Economic https://www.imf.org/en/Publications/WEO
