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Introduction to Economics | A-level Economics | OCR, AQA, Edexcel

hi guys in this video we'll be looking

at an introduction to economics and

finishing off with a summary right so

what is economics we're gonna go through

a bit of a narrative to try and

understand what exactly economics is and

we are going to start off by thinking

about decisions so economics studies how

individuals make decisions within an

economy so what we have right here is an

individual who has to make a decision

over whether to buy a new TV or a new

car and these sorts of decisions can be

big and small and have to be made by

individuals in an economy everyday and

we can think of the economy as a system

of many individuals making decisions and

choices so what we have in our economy

which we can easily observe is a

collection of individuals and all of

these individuals will be making their

own decisions and collectively all of

them together are known as an economy so

when all of these people are making

decisions and all of these decisions are

individual we start to build an economy

and a good way to think about an economy

is as a system and in which case this

means that its constituent parts the

individuals all interact and impact one

another so let's take this individual

here now their actions are going to have

a knock-on effect that may impact others

and therefore just by this individual

here making one decision is going to

start off a chain reaction or knock-on

effect that will in some way end up

affecting this individual here an

example that may be more familiar to you

is in biology where you may have learnt

about ecosystems and within an ecosystem

we have many different constituent parts

such as the weather food chains and

levels of biodiversity

okay so if this is a system let's try

and change something within that system

so let's suppose that the weather in the

Nikko system changes so let's suppose

that the temperature in the environment

has increased

now this may end up having an impact on

all other parts of the ecosystem so the

warmer weather might result in plants

dying as they do not get enough water

and this would lead to a lack of food

for other animals and this would have a

knock-on effect to the rest of the food

chain and overall this is going to

impact the whole ecosystem and its

biodiversity similarly within an economy

we have many individual parts which all

interact with one earth so within our

economy we have firms consumers workers

and they all interact with each other

because of the decisions that they make

and they may not consciously be

interacting with each other so the

worker isn't going out specifically to

make an action to interact with the

consumer however the actions that the

work takes will impact the consumer so

let's imagine that consumers spend more

money in the economy this would lead to

a greater production of goods and

increased employment of workers so we

have higher spending as the start of our

chain of events and in response to this

we are going to see an increase amount

of production and therefore the firms

are going to increase the number of

people that they employ so we can see

how we've had one initial effect where

there is more consumer spending and this

has impacted the economy in a much wider

sense therefore all individuals within

an economy make choices which other

individuals react to with their own

decisions so for example we can have a

consumer that is going to buy a good

using their money and therefore in

response to this we have an individual

who is selling a good or is deciding to

sell a good and each individual then

aims to make the best decision given

their available resources so that's the

aim of our decision-making is to make

the best decision

and there are many different examples of

resources available to individuals so we

have financial resources such as money

we have human resources such as labor

and then we have something more simple

such as machinery and production

equipment now there are many more

resources in our economy so this is just

the limited list so it actually goes on

much more than this so the examination

of the process of decision-making is

known as the study of economics so

economics studies the decisions

individuals make in an economy given

their limited resources hey guys I hope

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