FORM FIVE ECONOMICS STUDYING NOTES
LESSON NOTES ECONOMICS FORM FIVE|FORM FIVE STUDYING NOTES ECONOMICS|PDF FOR FORM FIVE NOTES ECONOMICS|GET FREE STUDYING NOTES ECONOMICS AMBILIKILE.
The subject matter of economics means what economics deals with. Economics as a subject deals with all the problems, which arise, in the following economic activities.
1. Production.
2. Consumption.
3. Distribution.
4. Exchange.
5. Allocation of scarce economic resources.
6. Human wants and their satisfaction.
Production
Production has two meanings.
(i) General meaning.
(ii)Economic meaning.
General meaning
In this meaning production is a creation of goods and provision of services for personal consumption. For example, a carpenter who produces furniture for personal use but not for sale.
Economic meaning
In economic meaning, production is the creation of goods and provision of services for exchange in order to satisfy wants or is the creation of utility/satisfaction through exchange. For example a farmer who produces cash crops, private hospitals which provide medical services for sale.
Economics is concerned with problems which producers face in the process of producing due to scarcity of resources.
These problems are such as:
i. What to produce.
ii. How to produce.
iii. How much to produce.
iv. For whom to produce.
v. Where to produce.
vi. When to produce etc.
Economics enables producers to make choice of what to produce, how to produce, how much to produce etc with the scarce resources.
Consumption
Consumption is the process of making use of the commodity which has been produced.
For example eating food, wearing clothes, driving a car, writing with a computer, reading an economics book or any other written material etc.
Consumption is actually the final stage of production. There would be no production if there was no consumption. Consumption enables production to continue. If goods produced by producers are not consumed, production will fail to continue.
Economics is concerned with solving problems, which affect the process of consumption due to scarcity of resources. Economics enables consumers to make choice of what goods or services to consume with their limited income.
Exchange
Exchange is the process of buying and selling goods and services. Production in economics is mainly for exchange. Economics is, therefore, concerned with all problems, which may arise in the process of exchange due to scarcity of resources.
Economics enables businessmen and women to decide which kind of goods or services to exchange in order to maximize profit. Also economics gives answers as to how much to exchange, when to buy or sell and for whom to sell in order to maximize profit.
Distribution
The word distribution has two meanings:
(i) General meaning.
(ii) Economic meaning.
General meaning (Meaning in general usage)
In this meaning, distribution means the process of transferring goods and services from areas of production to areas where they are needed for consumption. A good example is the distribution of Coca cola products which is done by the coca cola company by transferring their products from the factories to various shops throughout the country.
Economic Meaning
In economic meaning, distribution means the process of rewarding or making payments to factors of production from the total output produced or income generated in a firm or a nation. The reward is made to factors of production which are land, labour, capital and Entrepreneurship.
Distribution shows who gets what in the process of production, that is, how much wages the labour receives in the process of production, how much interest is paid to the owners of capital, how much rent is paid to owners of land and how much remains as profit to the entrepreneurs.
Economics gives answers to how much each factor of production should receive in the production process and the distribution of national income.
JOIN our WhatsApp group