ECONS 101

  INTRODUCTION TO ECONOMICS

Hey Guyz, This is our First Official Economics Post for 2015, So we are Excited!!!. We are going back to the Beginning, to the Basics to truly understand what Economics is all about.

MEANING AND BASIC CONCEPTS.

Economics in my own understanding is a social science that studies human beings and their behavior. Most especially, their behavior in relation to production, distribution of wealth and business. It is also concerned with the analysis and explanation and not mere descriptions, of why standards of living in different countries vary

Some famous definitions of Economics include-

Alfred Marshal who defined economics as “A Study of Mankind in the ordinary business of life.”

Adam Smith defined economics as “An Inquiry into the nature and causes of wealth of nations.”

John Stuart Mill defined economics as “The Practical science of Production and Distribution of Wealth.”

H.J. Davenport defined economics as “The science that treats phenomena from the

stand point of price.”

However, the most generally accepted definition of economics is the one put forward by Prof Lionel C. Robbins. He defined Economics as “The Science which studies human behavior as a relationship between ends and scarce means which have alternative uses.

This definition is more acceptable because it covers Scarcity, wants, human behavior and choice. The ends here mean human wants, desires and needs which are numerous. 

Scarce means are the limited available resources used in satisfying the numerous human wants. This all put together is that the means to satisfy our human wants are limited. 

Alternative uses stands for the scarce resources that can be used for different purposes.

NATURE & SCOPE OF ECONOMICS.

Economics belongs to a group of subjects called the SOCIAL SCIENCES. Other of such subjects is Government, Political Science, Philosophy, Anthropology, Religious Studies, Psychology, Geography, Sociology etc. All these subjects deal with various aspects of human behavior.

Even though Economics is often regarded as a science subject, it does not assume the same level of precision and accuracy as any of the natural/ pure/ physical sciences like chemistry, physics and biology. This is because economics deals with human behavior, which is very complex and changes from time to time depending on circumstances.

BASIC CONCEPTS OF ECONOMICS.

1.     WANTS- are an insatiable desire/ need by human beings to own goods/ services that give satisfaction. The basic needs of man include- Food, Clothing, and Shelter. They are unlimited in number and nature.

2.     SCARCITY- is defined as the limited supply of resources which are used for the satisfaction of unlimited wants. In other words, they are the inability of human beings to provide themselves with all the things they desire/want.

3.     SCALE OF PREFERENCE-is defined as a list of unlimited wants arranged in the order of their relative importance. That is, in the order in which they matter to you. For instance, a book might be more important to you to buy now than even a car. Your list of priorities in the order of importance.

4.     OPPORTUNITY COST- It is the same as Alternative Forgone. That is, what you give up in order to gain something else, on your Scale of Preference what you delay in order to do another. When you prefer to buy a Beats by Dr Dre Headset over a pair of Nike Sneakers, the Sneakers are the alternative forgone/opportunity cost.

IMPORTANCE OF SCALE OF PREFERENCE:

a.     Ranking of Needs- Scale of Preference helps to put our needs in their right order. Order of Priority.

b.     Financial Prudence- It helps to make you more financially managed and accountable.

c.      Identification of Highest Priority- It helps you pick out with ease your highest priority.

WHY WE STUDY ECONOMICS:

1. To equip students with the basic skills for analyzing economic problems in order to take better economic decisions.

2. It helps the Government of a Country to promote growth and development and also improve the standard of living of the citizens.

3. It helps the Citizens to better understand the Economic decisions that are taken by the Government of a Country.

BASIC ECONOMIC PROBLEMS

1. WHAT TO PRODUCE- This is a Fundamental Question for every industry needs to answer, Are we going to be a Goods/ Service Provider? If Goods What Good do we Specialise In? If services What service do we specialise in? Questions like this are a must to be answered before any economic activity can take place.

2. HOW TO PRODUCE-  This is another fundamental question to ask. Are we Labour/Capital Intensive? Is this a Small-Scale/Large-Scale Production Company? These must receive answers before an industry is born.

3. FOR WHOM TO PRODUCE- This talks about your Target Market. Is it Women/Men/Youths/Elderly/Children/Adolescents. This talks about having a focus and purpose. Should it be for the Rich/Super-Rich/Wealthy/Average/Poor etc.

These are fundamental questions that must be answered before a Company or Industry can be set up.

Hope this was very helpful to you, leave a comment of what you think of this tutorial and your questions below. Have a Blessed Day and Remember You are Amazing. God Bless.

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COMMERCE 101

                          DIVISION OF TRADE

Hey Guyz, We are Back with the continuation of the Topic we started last week. Hope your weekend was splendid cos mine was... Well let's get right to business.

1. HOME TRADE

We defined it in our last session and it is divided into: a.) Wholesale b.) Retail.

a. WHOLESALE TRADE- It is the buying of goods in large quantity from Producers and selling of goods in large quantity to Retailers. For Example, A Huge Store Like Next In Abuja Nigeria buys in large quantity from the companies that produce these goods in order to sell to their customers in large quantity which can be smaller supermarkets or stores.

b. RETAIL TRADE- It is the buying of goods in small quantity from Wholesalers and selling of goods in smaller quantity to consumers and customers. For Example, When Small Stores buy in smallquantities and sell in smaller quantities to you, like where you go to buy a pack of sugar is a Retail Store because they sell in small quantity to you.

2. INTERNATIONAL TRADE

We defined it in our last session and it has 2 types, which are: a.) Bilateral b.) Multilateral.

a. BILATERAL TRADE- It is a trading between two countries. Like when We in Nigeria buy goods online from other countries like the UK, USA etc.

b. MULTILATERAL TRADE- It is a trading between more than two countries. Like a Trade between Nigeria, Ghana & Kenya.

It is however divided into three, namely:

i. IMPORT- It is the act of bring in (buying) goods and services from other countries into your country of residence. That is receiving Goods and Services from a different Border or geographical Location.

ii. EXPORT- It is the act taking goods & services to other countries from your own country. It is selling goods and services to other countries from your country for the purpose of increasing your brand popularity.

iii. ENTRE-PORT- It is the act of buying goods & services from one country to re-sell to other countries. It is double-way.

AIDS-TO-TRADE

1. BANKING- They are there to provide funds in form of loan and overdraft to individuals and companies to promote their businesses and industries. They indeed help Trade move in accelerated form and also enable employment to be provided to more people.

2. TRANSPORTATION- This is essential for Businesses that depend heavily on transportation, that is moving of the goods from the Production point to the Distribution point (Market). So the provision of Good and Portable Roads in the communities is very important and this is one of the aids to trade that involves Government's input.

3. ADVERTISING- This is solely the responsibility of the company in question, they have the burden of increasing the awareness of the customers about their goods or services. Be it by Catalog, Free Sample, Trade Fair, Fliers or Tv & Radio.

4. WAREHOUSING- This is also for the company to handle, making provision for the storage of some goods for future purposes is vital to the healthy growth of the company and its revenue and profit. It means you are never without your goods for the purpose of Purchase etc.

5. COMMUNICATION- This is mostly within the company and amongst the employees of the company. It involves sending and receiving information from one place to another through the Internet, Intranet or Telephone etc.

6. INSURANCE- This involves putting up security for the business in case of Loss in order to get restored to former position in such cases. It's very important especially for big budget and capital intensive businesses and companies.

FUNCTIONS OF COMMERCE

1. It helps to develop the Technology in the country and it also provides new ideas for what technology can step in to make better.

2. It provides lots of Employment Opportunities for the masses and it improves people's standard of Living and the Per Capita Income.

3. It contributes to the factors that satisfy the wants of man, it helps get our wants and needs met.

SOME QUESTIONS:

1. Production ends when goods? (WAEC 1989)

2. If a Business Man imports stock fish with a view to exporting them to other countries, this form of trade is known as? (WAEC 1989)

3. Buying and selling of goods and services within the geographical areas of a country is called? (WAEC 1989)

4. Are Warehouses established to avoid changes in prices from resulting in shortage? True/False (WAEC 1989)

5. Is the Retailer the Last Link in the Chain of Distribution? Yes/No ( WAEC 1989)

This brings us to the end of today's session, Pls do attempt the questions above, this is one of the changes we have inputted. Hope this was very helpful to you, leave a comment of what you think of this tutorial and of your questions below. Have a Blessed Day and Remember You are Amazing. God Bless.

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COMMERCE 101

                     INTRODUCTION TO COMMERCE

Hey Guys, This Year we are going to run by the special Grace of God a three-days per week blogging schedule, where we will upload posts on only three days in the week. This is to ensure that we adequately prepare our posts and give attend to promoting this blog more and to increasing the traffic and page views of this blog per day and week. To all those that kept coming every day, week or month to read what we have posted throughout the year 2014, this is me saying THANK YOU & GOD BLESS YOU ALL.

So back to business, we said in our last post that we will revisit all the topics we treated last year, in order to further break it down and understand it. So today we are starting Commerce 101 again!!!.

             Commerce we said is all about Production, Distribution & Exchange of Goods & Services. In Order words, it concerns all activities that make Trade & Aids-to-Trade possible. Now to add to that definition we are saying that commerce is for instance when a Milk Producing Company like Cowbell (In Nigeria) drills the milk in raw form from the cow and processes it to give us Evaporated ones or Powdered ones, now it is produced and a Mart like Wal-Mart buys it from Cowbell and thenMr. Van buys a sachet of cowbell. This is the process of commerce, we all perform commercial activity everyday knowingly and unknowingly.

        Scopes of Commerce just talks about the branches of commerce and they are just two:

1. Trade

2. Aids-to-Trade

        Trade is buying and selling, giving money and receiving service or good. Meeting the need of the seller (Money) for the seller to meet your (buyer) need (goods/services). It's an interaction of two people or two elements for the purpose of exchange one need for another- goods/services for money or worth or value. It's a Trade-by-Barter Situation only that this time it is more accurate in measure than in an actual Trade-by-Barter. Its paying $45 for a Jimmy Choo Heels or paying $100 to get the Latest Play Station. LOLZ

      Aids-to-Trade are like the catalyst of Trade, the Motivators of Trade, that make Trade possible and easier. In my Definition I stated that they are the auxiliaries to Trade, they are the Agents that Facilitate and help Trade become a Reality.

     DIVISIONS OF TRADE

1. Home Trade

2. Foreign Trade

     HOME TRADE

It is just basically Trading Activities within a Geographical Location, within the borders of a Country. Trade within the United States of America and Trade within the Federal Republic of Nigeria, these are classified as Home Trade. Going to a Supermarket in your area to buy something like a pack of sugar is Home trade while buying Shoes online from America that would be shipped to you is NOT Home Trade. We also said that another name for Home Trade is LOCAL/ INTERNAL TRADE.

      FOREIGN TRADE

It is basically buying across borders and geographical locations, crossing over physically or online to perform trade. For instance, Buying Clothes in Nigeria from Dubai, UK, USA. It can also be referred to as INTERNATIONAL/ EXTERNAL TRADE.

This is where we will draw the curtains for today, Hope you enjoyed every bit of it and hope to see you in our next tutorial by Next week by the Grace of God. Keep revising and understanding this topic. May God Keep you until we meet again. God Bless You. Pls do leave a comment below....

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