0:04 um um dear
0:07 students uh enrolled in introduction to macroeconomics
0:08 macroeconomics
0:11 course uh in this lecture we're going to
0:14 give uh a brief introduction on
0:16 economics uh for those
0:20 who didn't take uh the introduction to
0:22 microeconomics course in the first
0:27 semester and uh it will give you a brief
0:30 on what economics is
0:32 uh the difference between microeconomics and
0:33 and
0:37 macroeconomics and the important note is
0:40 um the two courses uh the course of
0:45 introduction to microeconomics and U the
0:48 U the course we're actually uh taking
0:51 now the introduction to macroeconomics
0:57 are not a um related to each other uh in
1:00 a way that uh for those who didn't
1:03 actually take the uh introduction to M
1:06 microeconomics course I uh that would
1:11 not be a big problem for them U now
1:15 because um all you need to know is uh
1:17 what economics is and the difference
1:22 between uh micro and
1:27 macroeconomics and uh this will
1:31 um yeah this will tell you that that uh
1:35 there is no need actually for you to to
1:38 have taken the introduction to
1:41 microeconomics scores in order to
1:45 understand the current one so let's go
1:47 through uh the
1:51 basic uh concepts of Economics through a road
1:52 road
1:56 map uh so what is
1:59 economics uh economics is a social science
2:01 science
2:05 uh concerned with efficient use of
2:08 limited or scarce
2:11 resources uh to achieve maximum
2:24 wants so it's a social science means
2:28 that it's concerned with human behavior
2:31 so we're studying
2:34 um persons individuals a
2:39 human uh who do some actions and uh we
2:43 study those actions now what those
2:48 actions are related to is a uh the that
2:51 it's concerned with the efficient
2:54 efficient means uh reaching the
2:59 maximum benefit or uh the maximum my uh
3:05 Happ happiness okay the best use of
3:10 limited limited here means um a it's
3:14 it's not a endless it's not a a
3:19 something that a you can't uh you can't
3:23 count now limited means that it's a um
3:28 it has some a barriers a um like if you
3:33 say that uh um you have a um
3:37 $10 then that's limited your budget your
3:44 income your um uh uh money is is limited
3:46 to those $100
3:47 $100
3:51 okay so that's what we mean by scarce
3:55 resources so scarce resources means that
4:00 the resources the the um any that is
4:05 surrounding us a uh except for air and
4:09 water a everything is scarce everything
4:12 is limited uh like money for example you
4:15 have limited resource limited
4:19 income uh you would have limited the
4:25 uh uh limited houses limited the uh a um
4:29 transportation time for example a um
4:30 limited job
4:34 jobs Etc so these are scarce means that
4:39 there are there is a some number of it
4:42 whether it's a few or a lot or a uh a
4:45 large number but there is a specific
4:53 resource uh so uh economics is concerned
4:58 with um the human as it's a social sence
5:03 so it's the human behavior the human uh
5:07 reaction into having uh limited
5:09 resources scarce
5:14 resources um to achieve maximum
5:19 satisfaction of the material want
5:21 want
5:26 so um this is what we mean by uh a scarce
5:27 scarce
5:32 resources a uh means that it's what we
5:37 use to a um to satisfy to fulfill to
5:43 make us um happy when we a uh get what
5:48 we want okay now the distinction is
5:52 between wants and
5:56 needs so the difference between wants
6:00 and needs is that um you may give lists
6:03 and lists of your
6:08 want um beginning from a um the simple
6:13 the simple want to a um simple want of
6:18 having a um a um an adequate celery
6:23 having a u a nice house a nice car Etc
6:26 into um those
6:30 uh uh great or uh
6:32 I I don't know traveling every day
6:34 having a
6:38 helicopter yeah that's that's the kind
6:41 of wants that everybody would would
6:44 would list uh some of you may think of
6:51 having a a a new mobile phone a uh a uh
6:55 new laptop Etc so these are unlimited
7:00 ones you can write um a whole list of of
7:04 wants but the problem is that you have
7:07 scarce resources you have limited income
7:12 limited budget limited amount of money a
7:14 uh or other
7:17 limitations that would enable you only
7:22 to choose between the the wants the the
7:27 lists the the number of wants that um
7:30 you have just um
7:34 gave gave us uh if you want you can you
7:37 can write that list of of your wants
7:39 wants
7:42 um but on the other hand uh when you
7:45 think of your um resources your
7:49 financial resources your money uh
7:51 available with you you would have to
7:55 think of prioritizing your wants prioritizing
7:56 prioritizing
8:03 means um sitting a uh the wants in order
8:06 beginning with the most
8:15 You by doing that you're you're sitting
8:17 your a wants
8:18 wants
8:22 by your needs so the the on the top of
8:27 your wants list you will have your needs
8:29 the first need for example for many
8:32 people is um
8:36 food a uh clothing
8:41 shelter housing so you would need um
8:44 some food in order to live and to give
8:47 you energy and to survive uh you will
8:49 need um
8:53 clothing um something to wear to cover
8:56 you up and uh you will need shelter a
8:59 house a place to stay in Okay so so
9:01 these are the most
9:04 important uh wants which we call now
9:08 needs okay so the first thing you would
9:10 think of a um
9:15 satisfying with your limited resources
9:19 are those basic needs your Necessities
9:21 Necessities
9:29 okay so uh when you are forced to um to
9:32 choose choose between the the the wants
9:35 that that you have to have when you are
9:38 forced to H have them
9:42 prioritized in order to choose between
9:43 the most
9:46 important uh wants uh this is what we
9:50 call choice and this is what we're doing
9:59 okay so economics is all about choice
10:07 um
10:12 wants a uh with your limited
10:17 resources uh is is is called economics
10:23 and what is uh forcing us to choose is
10:26 scarcity so scarcity is the main problem
10:30 of Economics so without scarcity
10:33 wouldn't need to to make any choices if
10:36 you have unlimited budget an open budget
10:39 to buy anything you want then you
10:42 wouldn't be in the situation of having
10:47 to choose between different options but
10:50 we need to remember that budget is not
10:56 the only um problem sometimes um
10:58 sometimes time is is the limited resource
11:00 resource
11:03 um you may be able to to do three things
11:07 at the same time uh to travel abroad a
11:13 uh to have fun with your friends a uh or
11:17 um to enjoy some time by
11:20 yourself uh or to go to work for example
11:22 so these are some choices that you would
11:26 have and you want all of them you would
11:28 like to do all of them but you have
11:31 limited time you can't do all of them at
11:33 the same time so you have to choose
11:36 which of those
11:40 choices a um that you would want to do
11:43 but uh you can't do at the same time so
11:45 you need to choose which of those
11:47 choices or
11:54 options uh that would make you a um a
11:57 uh or will give you higher satisfaction
12:01 okay will make you more happy happy okay
12:05 so for some of us uh they would value
12:08 they would like to stay with their
12:11 family more than traveling abroad so
12:13 that would be that would give them more
12:16 happiness more satisfaction than
12:18 traveling abroad so they would go with
12:22 that choice okay uh so that's what we
12:26 call by what what we call a
12:30 um a choice okay
12:34 um and because time is a scarce uh it's
12:38 limited we have limited time in a day or
12:42 um in a week or Etc so we need to choose
12:45 between the different activities that we
12:48 need to do or we want to do a in that limited
12:59 time um so the economic perspective is that
13:01 that
13:04 um what we call a unique way a special
13:08 way of thinking about issues that are
13:12 considered to be economic so by economic
13:16 here we mean um scarcity and choice
13:19 which we've just explained how important
13:23 it is and a how related choice to
13:26 scarcity because as we've mentioned we
13:30 don't need to choose if there is no no
13:32 scarcity uh the second one is the
13:35 rationale Behavior what we mean by
13:37 rationale behavior is that you would
13:41 always want to maximize
13:45 your uh benefit or satisfaction or
13:48 happiness so that's what we call
13:51 rational we wouldn't expect somebody to
13:55 uh to pay more for something that um
13:58 that requires a specific price for
14:02 example if you wanted to buy um some
14:06 bread and it costs only um
14:11 $5 why would you pay more for that so
14:14 that's the rationale Behavior this this
14:17 amount this price is what will give you
14:21 the maximum satisfaction of or maximum
14:25 happiness of a uh consuming or eating
14:27 the this
14:30 bread so uh
14:33 you would you would pay only that amount
14:38 um that's uh the level that will give
14:40 you or the price that would give you the highest
14:43 highest
14:45 satisfaction a
14:49 uh so you wouldn't want to pay more for
14:53 something that would give you a uh the
14:56 same satisfaction or same
15:04 okay um let's let's give another example
15:07 on that a uh if you want to
15:10 reach um a specific place if you want to
15:14 go to work for example and you have two
15:18 options to go a for transportation to go
15:22 by a car uh that would cost you um 10
15:28 shakles or to uh to walk to your work
15:30 and that would cost you nothing but
15:34 we'll give you some a exercises before
15:37 reaching work
15:41 um so the rationale behavior in this
15:46 case is to choose uh reaching work
15:53 uh a u by walking or walking to work a
15:56 instead of taking the taxi or the car so
15:58 that's the rational behavior in this
16:01 case because it will give you the same
16:04 satisfaction with less Cost Less
16:08 Price now what would be the case if you
16:12 were late to work now in this case uh
16:15 taking the taxi with 10 shakles will
16:20 save you uh or save your time because in
16:23 this case you will reach work on time
16:26 but what would happen if
16:32 um if you walked to work and uh it took
16:36 you 10 minutes for example or 20 minutes
16:39 uh to reach work in this case you will
16:42 you will be less happy because you will
16:46 have some a uh penalty or punishment
16:52 from work by uh maybe uh um yeah it it
16:55 could be in in the uh reduction of your
16:59 salary or so but uh yeah that's just a
17:03 example of some choices that we would be
17:07 a um sometimes happy to to go with even
17:11 if the cost was higher okay so that's
17:14 what we call irrational
17:18 Behavior okay what are other issues or
17:20 problems of
17:23 Economics marginal Thinking by marginal
17:27 thinking we're thinking of costs and
17:31 benefits a uh what would be the
17:37 coast um a uh you know cost of of using
17:40 something what would be the cost of a
17:43 for example a um
17:48 a reading or studying for example a uh
17:52 for another hour so that's the margin
17:56 margin means one additional unit okay so
17:59 what would be the cost of a studying for
18:03 one more hour uh the coast could be
18:05 um a
18:08 uh not staying with your family for an
18:12 hour for example or not sleeping for an
18:15 hour okay but what would be the
18:18 benefit in this case the benefit would
18:23 be getting more education learning more
18:28 and eventually passing the exams okay so
18:30 that's what we we call a marginal
18:33 thinking Again by margin we mean one
18:37 additional unit a one additional dollar
18:39 you're paying for something one
18:41 additional a
19:07 okay let's see what we have here
19:09 here
