Business Economics and Analysis

Economics is a social science, study of human behavior that is formed by the economic activity. By social science, it means a relationship, whereas human behavior involves your brain.

Commodities are of two types; the first one are goods that mean they are tangible, whereas on the other hand we have intangible commodities known as services.

 

Needs, wants and demands:

Need:
Needs are also known as necessaries of life, which cannot be avoided. For example, food, shelter, cloths.

 

Wants:
Things which are not necessary in your life. Wants are usually accelerated because of our environment. It is also known as willingness to have something.

 


Demand:

When willingness is backed by your buying power or you have the ability to buy whatever you are willing to have will be termed as demand.

 

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Factors of production:

 

There are four important factors of production that is involved in an economical activities. These economical activities are as follows:

 

  1. Entrepreneur: They are the most important part of the factor of the production. They are the ones who initiate economic activity. For example you decide to open a business for producing and exporting towels.
  2. Land: You need a place to initiate your economic activity. Extending our above example, now you need a piece of land where you want to build your factory in order to produce towels.
  3. Capital: You need resources to buy everything that is involved in your economical activities. For example, chair, pen, machines, etc.
  4. Labor: You need human resources to help you in carrying out your economical activities. For example, workers in factory looms, for loading and unloading, etc.

 

 

Al of the above 4 factors are owned by entrepreneur but still during the calculation of profit, you need to subtract land rent, labor wages, capital interest form the revenue generated.

 




  • Mikel

    View Comments

    • Economics is one of my favorite subjects when I was studying in college. This is one of my subjects in my commerce course, especially the freshmen. I remember that we had the thorough discussions about wants and needs, commodities, entrepreneurship, among others.

      I also remember the types of commodities the producers or the entrepreneurs to offer. So they could be seen or tangible and they couldn't be seen or intangible. Thus, we come out the definition of economics is a science of providing the people of their wants and needs according to their demands.

      Wants may be important or not. But needs are necessities. For without them, the consumers or the people may not live or exist. So they may be referred to foods, medicines, among others.

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