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Economic in simple language, Cheat Sheet of Economics

Economics

Here I have covered all the important topics of economic in simple and clear language.

Typology: Cheat Sheet

2025/2026

Available from 12/25/2025

chuskitstanding
chuskitstanding 🇮🇳

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BA Programme Economic (First
semester Students)
Definition of Economic
!
Economic is a social science that studies how individuals and society use limited (scare)
resources to satisfy their unlimited wants. Since resources are scare people have to make
choices about what to produce, how to produce and for whom to produce. Economic helps us to
understand these choices and how resources can be used in best possible ways.
In simple words in our daily life, we want many things like food,clothes, education, and comfort,
but we do not have unlimited money or resources. Economic studies how people decide to use
their limited income and resources to satisfy there needs and wants. !
What are the central problem of an economic?
Every economy faces some basic problems because resources are limited and human wants are
unlimited. These problems are called central problems of an economic. There are three central
problems.!
1.What to Produce
This problem is about deciding which goods and services should be produced and in what
quantity. !
For eg Should the economic produce more food grains or more luxury goods like car and mobiles. !
2.How to Produce
This problem deals with deciding how goods should be produced, which method of production
should be used. !
For eg Should a good be produced using labour- intensive method ( more workers) or capital
intensive method ( more machines)? !
3.For Whom to Produce
This problem is about deciding who will get the goods and services that are produced. !
For eg Should goods be produced is mainly for the rich or poor or both?!
Short conclusions
These central problems are arise due to scarcity of resources and unlimited wants !
What is Microeconomic? Nature and Scope of
economic
Microeconomic is a branch of an economic it studies about the behaviour of an individual units in
an economic such as consumer, producer, firms and business. It helps us to understand how
these individuals make choices in the allocation of limited resources like time, money and labour.!
It focuses on small part of the economic unit not the whole for eg how a consumer will decide
what to buy, how to set a price for a company product and how wages are determined for a
specific job market. !
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Download Economic in simple language and more Cheat Sheet Economics in PDF only on Docsity!

BA Programme Economic (First

semester Students)

Definition of Economic

Economic is a social science that studies how individuals and society use limited ( scare) resources to satisfy their unlimited wants. Since resources are scare people have to make choices about what to produce, how to produce and for whom to produce. Economic helps us to understand these choices and how resources can be used in best possible ways. In simple words in our daily life, we want many things like food,clothes, education, and comfort, but we do not have unlimited money or resources. Economic studies how people decide to use their limited income and resources to satisfy there needs and wants.

What are the central problem of an economic?

Every economy faces some basic problems because resources are limited and human wants are unlimited. These problems are called central problems of an economic. There are three central problems.

1.What to Produce

This problem is about deciding which goods and services should be produced and in what quantity. For eg Should the economic produce more food grains or more luxury goods like car and mobiles.

2.How to Produce

This problem deals with deciding how goods should be produced, which method of production should be used. For eg Should a good be produced using labour- intensive method ( more workers) or capital intensive method ( more machines)?

3.For Whom to Produce

This problem is about deciding who will get the goods and services that are produced. For eg Should goods be produced is mainly for the rich or poor or both?

Short conclusions

These central problems are arise due to scarcity of resources and unlimited wants

What is Microeconomic? Nature and Scope of

economic

Microeconomic is a branch of an economic it studies about the behaviour of an individual units in an economic such as consumer, producer, firms and business. It helps us to understand how these individuals make choices in the allocation of limited resources like time, money and labour. It focuses on small part of the economic unit not the whole for eg how a consumer will decide what to buy, how to set a price for a company product and how wages are determined for a specific job market.

Nature of Economic as a Science and Art

a.Economic as a Science

  • Economic as a Science because it studies about facts, data , cause and effect like a experiment.
  • Economic as a science because it studies about human behaviour how individuals uses limited resources to satisfy their unlimited wants and needs.
  • Economic as a science it collects data like price, income, demand and supply.
  • Economic as a science it make theories like law of demand ( when price goes up and when prices goes down )

b.Economic as a Art

  • Economic as a art because it uses knowledge in practical life
  • Economic as a art because it uses economic principles to solve real life problems.
  • For eg government uses economic to decide the subsidies and tax.
  • Business uses economic to decide the price of company product.
  • Household uses economic to decide how household will use monthly income to buy household products.

C.Economic as a Positive science

  • Economic as a positive science as it explain what is it deals with the fact and objective reality.
  • It does not give suggestion, opinions and value judgement whether the situation is bad or not.
  • Economic as a positive science explain the things as they are
  • Economic as a positive science are accurate
  • For eg India’s growth of GDP by 6,5% is a fact and reality.

D.Economic as a Normative science

  • Economic as a normative science explain what oughts to be. It does not deals with fact and objective reality.
  • Economic as a normative science gives suggestions, opinion and value judgement to solve the economic problems.
  • Economic as a normative science explain how economic work and what are economic policies should be followed to improve the economic.
  • For eg how to reduce gap between rich and poor.

The Scope of Economic

1.Microeconomic

  • Microeconomic studies the small part of the economic unit like one person, one company and one product.
  • Microeconomic focuses on demand and supply, determination of price, production cost, and market structure.
  • It helps us to understand about the behaviour of an individual units in an economic such as consumer, producer, firms and business.
  • For eg it deals with the employment of a single firm of the sector.

2.Macroeconomic

  • Macroeconomic studies the whole part of the economic unit like country total income and total jobs in the country.
  • It focuses on inflation, unemployment, GDP and national income of the country
  • Macroeconomic looks at the overall economic issues and economic growth in the country.
  • For eg what is the cause of poverty in India.
  1. It helps us to make small decisions at a small level like pricing, costing, demand and supply.
    1. It helps us to make big policies like fiscal policies and monetary policies.