ECONOMICS is a science which studies human
behavior as a relationship between end and
scarce means which have alternative uses.
Economics can be considered as a science
1. Statement of problem
2. Hypothesis of the problem
3. Collecting of data on the problem
4. Organization / processing of data
5. Generalization of the data
6. Testing of the data
7. Predicting on the bases of the data
8. Limitations of economics as a science.
Scarcity – Is the inadequacy of resources
relatively to the need of an individual,
organization or a country to satisfy basic
Choice– These involves choosing one thing
instead of other in ones scale of preference.
Scale of preference – These is a list of
individual’s wants arranged in order of
important / satisfaction.
Opportunity cost– These can also be called
Money cost – Is the actual amount of money.
1. Household – They are the consumers of
goods and services produce in an economy.
They are also the suppliers of the productive
resource like land, labour and capital.
2. Firm/ Businesses – They produce and also
employ the productive resources.
3. Government – Government in the economy
depends upon a number of factors, political as
well as economic.
REASON WHY THE STUDY OF ECONOMICS IS
1. It helps in decision making while on the job.
2. It help us to solve economic problems.
3. It makes it possible to predict economic
trends with some degree of precision.
4. It helps to make rational choices from
various economic alternatives.
5. It makes it easier to institute measures to
These simply means the creation of goods and
provision of services to satisfy human wants.
Categories of goods
1. Free goods and
2. Economic goods.
Production takes place in
2. Industry and
Stages of production
Extracting > Manufacturing > Distribution >
CLASSIFICATION OF ECONOMIC ACTIVITY
1. PRIMARY SECTOR > Activities that take place
under the primary sector are farming, fishing,
hunting, mining etc.
Is concerned with the extraction of raw
materials from the soil, the sea and the
2. SECONDARY SECTOR> These is the
manufacturing stage which transform the raw
materials to semi finished or finished product
3. TERTIARY SECTOR> These is essentially a
service sector responsible for distribution and
involves all kinds of services enterprises .