Theme 1 Subject and method of economic theory

Theme 1. Subject and method of economic theory

1. 1 Economic needs, economic benefits and economic resources. The problem of economic choice

Needs - is the need or lack of something necessary to sustain human life, social groups and society

The types of needs The need for self-development the need to respect social needs the need for security physiological

Good - it means (things and services) to meet the needs Every good thing has a useful, but not all value Value is only the benefits that are rare compared to the needs Scientists are trying to measure the value, enter the term "marginal utility"

goods can be divided into two classes Natural products of nature Economic benefits

1. 2 The subject of economic theory

Economic theory is the science of the efficient use of scarce resources in order to meet the material needs of the limitless

Most economists agree that it is a universal science of the selection problems of limited resources and the economic behavior of the person. Limited economic resources and the impossibility of simultaneous and complete satisfaction of needs leads to the fact that economic theory becomes a positive and normative. The positive nature of economic theory is that it reflects an objective reality, trying to formulate scientific understanding of economic behavior. For example, the inflation rate of this year has been 6%. Normative nature of economic theory expresses her desire to find the best form of organization of production, ideal models of human activity in the economy. For example, next year we need to ensure GDP growth of 8%.

Economic theory The national economy as a whole (macroeconomics) Firms and households (microeconomics)

Economic theory Microeconomics examines the behavior of individual economic agents. In the center of the analysis - the prices of individual goods, the costs (expenses) of firms on the production, the mechanism of the firm, pricing, labor motivation, interests of consumers, utility goods and services. Macroeconomics studies the national economic system based on the emerging makroproportsy. The object of her study - the national product, the overall level of prices, inflation, and employment.

Historical aspects of economic theory's development

Mercantilism, the Physiocrats (Francois Quesnay founders who - 1694 -1774, Jacques Turgot believed that the 1727 -1781, Dupont de source of the wealth Nemours - 1739 -1781, V. -R. of society stands Mirabeau - 1715 -1789) - a trade (O. Kromvel school of political economy. 1599 -1658, Thomas The founder of the classical Maine - 1571 -1641, theory is Francois Quesnay, Antoine de who explained the fundamental Montchretien - 1575 role of agriculture in the 1621). increase of national wealth. Agriculture, in his opinion, was the only productive sector that creates wealth.

British classical political economy have shown that the general form of wealth is the value inherent in the goods and money. Neoclassical theory (marginalism) - is, above all, the micro-economic analysis. The focus of the neoclassical school - firm, industry, consumer, profit maximization and cost minimization, free private enterprise, the market as a system of free prices, profits and losses.

1. 3 Methods and functions of economic theory

Methods are divided into: general (philosophy) general science (historical, logical, mathematical) specific (for each branch of science)

The method of The Dialectic - the formal logic can doctrine of the correctly apply general laws of universally valid nature, society and form of thought. These laws (concepts, include the judgments, development of forms conclusions) and the of the material world means of thinking by moving from (definitions, laws of quantitative to mental activity). qualitative changes, This helps to reflection, selfachieve the true development of the statements and system by "denialconclusions made. denial. "

The Historical Economic and method allows us mathematical to consider the modeling, as one of the economic system methods, in the intrinsic allows to determine sequence of the cause of the historical formalized form of development. This changing economic mode helps to phenomena, the specifically provide patterns of these all the features of changes and their each system at consequences, and different stages of makes it possible to its historical forecast economic developments.

Economic law - is stable, recurring relationship between economic phenomena economic laws objective subjective

Objective laws are divided into general specific absolute laws trends

Function of economic theory cognitive practical. predictive

HOMEWORK You should makr the following topics The main aspects of mercantilism The main aspects of physiocrats British classical political economy Neoclassical theory (marginalism) The Teachings Of Adam Smith The Teachings Of Karl Max

HOMEWORK The Teachings Of Dzh. M. Keyns The main functions of economic theory The basic methods of economic theory