An Economy

• An economy refers to a social organization which has been formed to provide goods & services in order to satisfy human needs & wants

3 Major Functions

Utilizing goods & services in order to get satisfaction. (UTILITY)

Process of converting resources into goods & services. (PRODUCTION PROCESS)

Productivity is the ratio between the output & the input.

Productivity = Output Input

Differences between economic goods & non-economic goods (free goods)

Classification of Economic Goods according to their usage

2 Alternative solutions to solve the problem of SCARCITY2 Alternative solutions to solve the problem of SCARCITY

Selecting few wants to satisfy amongst unlimited wants.

When making choices the opportunity cost would arise.

The opportunity cost refers to the next best alternative

You are given the following information for an economy.

Population age above ten – 20 M Un-employed population – 5 M No. of students – 3 M House wives – 2 M Religion leaders – 1 M Disables soldiers – 4 M

Required to calculate …….

1. LABOUR FORCE

2. LABOUR FORCE PARTICIPATION RATIO

3. UN-EMPLOYMENT RATE

4. EMPLOYMENT RATE

Population age above TEN

20 M

Students 3 M

House Wives 2 M

Religious Leaders 1 M

Disable Soldiers 4 M (10)

10 M

Labour Force