Fundamental of Economic Concept

Topics: Economics, Economic problem, Scarcity Pages: 4 (888 words) Published: February 6, 2011
Fundamental of Economic Concept Basic Economics Problems| Faculty Of Science Computer and MathematicsECO 415 : Economics| Prepared By;Appy Hillester Sylvester2010170645CS 226|

Prepared For;Madam Saliza SulaimanDate of Submission;09th February 2011|


Fundamental Economic Concepts
Economic is a social science that studies human behavior as a relationship between ends and scarce means which have alternatives uses. ( L.Robbins )
Economic is basically one of the oldest disciplines among humanities and is categorized as social science that examines and analyses the economic activity of people in order to satisfy their needs and desire.

There are three very important concepts in economy:
1) Scarcity
Scarcity means when economic resources are limited in supply compared to the wants which unlimited. It is ‘wants ‘that are always ‘exceeding limited resources’ to satisfy them. Scarcity is a universal problem faced by both poor and rich nations in order to fulfill their needs. If there is no scarcity, there is no economics. Look in our own situation, where we always don’t have enough shoes, clothes, bags, and meals at the restaurants that we want. Same goes to society and governments where more funds allocated for flood victims and rebuilding infrastructure damaged by the flood in Johor and Malacca means that less money is available for hospitals and school in Kelantan. All of these unlimited wants and needs cannot be satisfied because the resources available to produce goods and services are limited. Factor of production are the basic resources used in the production process in order to produce economic goods and services. Four groups of factor of production; 1) Land

All natural resources provided by nature. Such as land, air, water, forest and others. 2) Labor
The services contributed by people in the production process that involve both mental and physical effort. Ex; lecturers, doctors and...

References: Deviga Vengedasalam and Karunagaran Madhavan, Principles of Economics. 2nd ed. Oxford Fajar. 2010.
Jamaliah Binti Taib and Norizan Binti Mohammad, Understanding Economics ( Theory and Application). 2nd ed. McGraw Hill.
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