Introduction to Economics
Year 9
Werda Ekhlas
What is Economics?
Let us name some limited resources.
Type in as pupils start giving answers.
Why is Economics important?
Economics can be of two levels.
Micro, which is personal and small scale. It can range
from an individual to a small scale shop.
And Macro, which is on a large scale, like understanding
the Fast-food market or how the economy of the
country functions.
Micro Economics
Let us take our personal lives into considerations.
We all get pocket money, which is limited and we have to
chose how to spend it.
With unlimited desires like grabbing a pizza, doughnut and
ice cream everyday, splurging on the new range of Sephora
Make-up and the new line of Aldo shoes. Or save up for the
new iPhone launching in October.
We are often left confused? So let us figure.
Micro Economics
We all get say AED 500 per month.
How would you divide your spends in the following buckets?
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School Stationary
Shopping
Movies
Food
Savings
Charity
Macro Economics
Even though Macro Economics is the study of larger markets and
national and global economies. Just for our understanding let us
take our homes as a Macro Economy.
Our parents work through the month and earn a certain amount
of salary. Now this is a limited amount and the full family cant go
splurging away. Buying a new car each month, getting that home
theater, that makes watching movies on Netflix as good as the
real thing. A 5 star family vacation every holiday season.
Families often have to budget themselves monthly to various
things, they need to spend money on things that help them earn
money too, such as travel to work, office clothes, etc.
Macro Economics
Our parents earn AED 10,000 per month.
How do think they should create a family budget?
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Food
House Rent
Travel
Clothing
Kids Schooling
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Outings
Loan
Household Goods
Entertainment
Healthcare
Benefits of Studying Economics
So, economics can be on various levels.
Largely economics is an overall study of society, how it
functions, from how we have transformed over the years
from barter trade to global trade.
Economics helps us evaluate the value of things, study
markets, competition, customers’ wants, needs and
purchasing capability.
Example of Economic Studies
Uber
The Problems
Understanding the consumer:
The customer faces problems such as waiting for a cab, uncertainty of
knowing the fair for the distance travelled and lack in choice of vehicle.
Understanding the market segment :
The market segment of taxi service, has overhead costs such as a cab
company owning all the vehicles. Further the drivers not motivated to
get more rides.
Example of Economic Studies
Solution
• An app that allows customers to book an cab from the comfort of
their home, so they don’t have to wait on the sidewalk.
• Customers know their fair beforehand and chose their own type of
vehicle as per their need.
• While, the cars are not owned by Uber, but rather the driver, lowering
overhead costs.
• They introduced an incentive module so on every ride the driver
earned more, motivating him to work harder.
Example of Economic Studies
InstaShop
The Problems
Understanding the consumer:
The customer doesn’t like grocery shopping, it is long, tiering, time consuming
process. They are ready to pay more for comfort and good service. In the world
of digital & growing e-commerce segment, customers are not comfortable
buying online.
Understanding the market segment :
There were no established player owing the vertical of online grocery
shopping. Reducing overheads like having an actual store, or a warehouse to
store goods. The trouble of sourcing the products and dealerships.
Example of Economic Studies
The Solution
• InstaShop launched an app that allows users to shop from the comfort of their home.
• They can choose from a wide range of products while sitting on their couch instead of
hunting the products by walking up & down the aisle.
• Early entry in the market already gave them a start ahead, while competitors played
catch up.
• They gave the customer the choice to pick their own neighborhood grocery store.
• Since all the products are being bought and delivered from existing grocery stores,
InstaShop doesn’t have to worry about any overhead costs or even source the
products.
• The service is quick and reliable, adding more credibility to the system.
Benefits of Studying Economics
Hence a student of economics becomes one of the most
important person in the room.
• Understanding the management of money flow in the
business and the market. Which helps in making sure
the business is always in profits.
• Forecasting threats to the business and making
informed strategies to combat any threat.
Benefits of Studying Economics
• Studying economics helps people finds jobs easily, and
even more.
• As all young entrepreneurs have studied economics
and evaluated their offerings form both a micro and
macro level to finally look at a successful venture.
Thank You.
Werda Ekhlas