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Economics Assignment Help


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“Economics is a science which studies human behavior in relation with ends and scarce means which have alternative use” LIONEL ROBINS in 1932. It is the study of how individuals and societies use limited resources to satisfy unlimited wants.

Resources or factors of production:

  1. Land: Natural resources, the “free gifts of nature”
  2. Labor: Both skilled and unskilled
  3. Capital: Not only money but also plant and equipment
  4. Entrepreneur: Who organizes the business


Types of Economics:

Micro-economics: Micro comes from Greek word mikros, meaning “small”. It is the study of the behavior of individual households, firms, and governments. It focuses on individual parts of an economy, rather than the whole. It is the study of a single tree in the forest

Macro-economics: Macro comes from Greek word, makros, meaning “large”. It is the study of the economy as a whole. It focuses on the big picture and ignores fine details. It is the study of the forest as a whole

Positive-economics: It makes mere statements. It does not dependent upon the value system of the observer. The Accuracy of positive statements can be tested by looking at the facts—and just the facts. It seeks to answer the question “What is ?”

  • Example: Higher the income, higher is the health care spending.
  • According to Becker and Murphy (1988), a 10 percent increase in the price of cigarettes leads to a 6% reduction in the number of cigarettes consumed.
  • A study by Hellinger (1991) estimates that the average yearly cost of treating someone with AIDS is $ 38.300, while the lifetime cost equals $102,000.
  • National healthcare expenditures per capita are higher in the United States than Canada.

Normative-economics: Study of “what should be”. It is used to make value judgments, identify problems, and prescribe solutions. They are the statements that suggest what we should do about economic facts. Normative statements cannot be proved or disproved by the facts alone.

  • Example: Households with income less than Rs 30.000 per year should be subsidized by the govt.  (Because they are unable to maintain a proper level of healthcare spending.
  • The government should increase the tax on cigarettes to prevent people from smoking.
  • It is in our country’s best interest that the federal government take a more active role in the prevention of AIDS.