* What is Economics? - "Theory of Efficiency."
* Purpose of Economics - To explain economic phenomena.
< Microeconomics and Macroeconomics >
The economic phenomena can be divided into two categories.
- to explain the economic behavior of individual
- the main question is "How are the prices of goods determined?" (Price theory)
- to answer this question, the followings will be asked:
"How is the demand for a good determined?"
"How is the supply of a good determined?"
"How does the market work to set the equilibrium price of a good?"
- to explain the economic problem of an economy in the aggregate (a nation)
- the main question is "How is the GNP determined?" (National Income Theory)