1. Dr. Ahmed El-Feqi
Ph.D Candidate in Economics.
Masters In Economics, University of East
B.A in Economics, Alex. University.
Ford Foundation member, U.S.A.
International Fellowship Programe, U.S.A.
Amideast, Cairo member.
Delta University teaching assistant.
4. What is Economics?
Economics is the study of how individuals
and societies use their scarce resources to
satisfy their unlimited wants.
Scarce = limited
Resources = things used to make other
things (goods & services)
5. What is the difference between a want
and a need?
Wants are items that we desire but are not
necessary for survival.
Needs are something like air, food, or
shelter that are necessary for survival.
6. How do we satisfy our wants and needs?
We buy goods and services.
What are “Goods”?
Ex: clothes or shoes
What are “Services” ?
activities that one person performs for another
such as haircuts or , Doctor, Teacher.
7. Why do we have to make choices about
which goods or services we can buy?
The resources used to make goods and
services are scarce. That makes the goods
and services scarce.
8. What is the difference between scarcity
Scarcity means that there is a limited
quantity of resources to meet unlimited
wants and needs.
Shortage is a situation where a good or a
service is temporarily unavailable.
9. All goods and services are produced
Factors of Production = resources
that are used to make all goods and
What are the factors of production?
Land, Labor, Capital, Entrepreneurship
10. Resources – Factors of Production
Natural resources (Land)– “free gifts of nature”
Land, minerals, oil, forests, air, and timber
Capital Resources – “manufactured aids to production”
Tools, machines, equipment, factories
Human Resources (Labor)– physical and mental talent”
These are the skills people have that are used to produce goods
Entrepreneur – the individual who combines the factors
of production in order to produce a good or service.
Risk taker, policy maker, and innovator
14. L a n d
R e s o u r c e s
( I n p u t s )
L a b o r C a p it a l
G o o d o r S e v ic e
( O u tp u t)
they need or
15. Factors of Production
LAND - cotton
designer, business owner
CAPITAL – thread, sewing machine.
GOOD – t-shirt
16. Factors of Production
Land Labor Capital Enterprise
Rent Wages Interest Profit
17. What is scarce?
Everything is scarce because our wants
ALWAYS exceed the limited resources
Simply put… Economics is:
And the definition of Scarcity is
Scarcity = wants > availability of
18. E. Napp
To think like an Economist, you must
always remember that scarcity exists.
You may only have ten dollars in your
pocket but you can certainly think of a
hundred different ways to spend it.
20. Basic Economic Terms
Economics The study of how individuals and societies use their scarce resources
to satisfy unlimited needs.
Scarcity Limited; time, money, resources.
Resources Factors of production; land, labor, capital
Land Items found in nature
Labor Work done by people
Capital Tools, equipment, factory, building NOT $
Goods Tangible items of value; computer
Services Intangible items of value; fixing a car
Producer Business who sells goods/services
Consumer People who buys goods/services
22. Human wants are unlimited, but resources
Scarcity of resources Þ necessity of
is the forgone value of the next best alternative
23. Types of Economics
Macroeconomics –deals with the economic
decisions of large bodies like the government.
Theories of Economics
Countries and their governments
Trade between countries
Microeconomics –deals with decisions of
smaller unit like individuals and firms.
Families = Households
Firms = Factories
24. Production Possibilities Frontier:
a graph show infinite number of points.
Each point represents a combination of
output for a fixed amount of inputs and
More of one good Þ less of another
Illustrates opportunity costs in production
29. Production Possibilities Curve
Points on the curve : Attainable &
Points inside the curve : attainable and
inefficient or underemployment
Points outside the curve are
unattainable at present.
Optimal or best product will some point
on the curve.
Dr. Ahmed El-Feqi
30. Efficiency and the production possibilities
Efficiency = no waste.
Every point on a production possibilities
frontier is efficient.
Any point inside the frontier is inefficient.
31. Scarcity & PPC
Points A & B desirable; “best”?
Point C is not possible
Point D is inefficient
To increase production of guns; Must decrease production
32. Economic growth = increase in production
of goods and services.
Outward shifts of the curve represent economic
D production Þ shift of the frontier