ABOUT THE ECONOMY

ABOUT THE ECONOMY

Economics began to develop since 1776, when a British economist named Adam Smith, published his book with the title "An Inquiry into the Nature and Causes of the Wealth of Nations". Adam Smith is considered the "Father of Economics".

 According to Professor P.A. Samuelson, an economist who had received the Nobel Prize in 1970. Economic is the study of individuals and communities to make choices, with or without use of money, by using limited resources, but it can be used in various ways to produce different types of goods and services and then distribute them for consumption, now and in the future, to various individuals and groups of people.

The main problem in an economy that is the problem of scarcity or shortage. Scarcity arising from the imbalance between the needs of society with the factors of production are available.

  The public need is the desire of the public to obtain goods and services. Items can be viewed and touched physically, but some are not able to be seen and touched, while the service can be interpreted as one's service.

Factors of production are the things provided by nature, or created by humans that is used to produce goods and services. The types of factors of production: land and natural resources, labor (labor rough uneducated, skilled workforce that has the expertise, educated workforce that has a high enough level), capital, and business expertise.

Limitations in producing normally in because of the ability to produce lower than the number of requests from the public.