[Introduction to Economics]: Why Scarcity Forces Every Ghanaian to Choose | Economics SHS 1 SEM 1 WEEK 1 (WASSCE & NaCCA Aligned)
Economics is not just a subject; it is the study of life itself—how we make decisions daily, whether buying ‘koko’ or funding national projects. This week, SHS 1 learners anchor their understanding to the single most critical concept in all economic theory: Scarcity.
## SECTION 1: Quick Summary
### The Economic Problem
* **Scarcity:** The fundamental reality that human wants are unlimited, but the resources available to satisfy those wants are limited (finite).
* **Definition:** Economics is the social science that studies how individuals, firms, and governments allocate scarce resources to satisfy unlimited wants.
* **Key Divisions:** The subject splits into Microeconomics (focusing on individual markets and agents) and Macroeconomics (focusing on aggregate variables like national income and inflation).
* **Economic Statements:** Positive economics deals with objective facts (‘what is’), while Normative economics deals with subjective opinions and value judgments (‘what ought to be’).
* **Career:** Economists work across all sectors, from data analysis in banking to policy formulation in government.
[Insert YouTube Lesson Video Here]
## SECTION 2: Academic Core
### The Fundamental Problem: Scarcity and Choice
The entire discipline of Economics revolves around one inescapable truth: scarcity. If resources were infinite, there would be no need to make choices, and consequently, no need for the subject of Economics.
Scarcity is universal. It affects the poorest household struggling to buy food and the richest nation deciding how to allocate billions of dollars.
Scarcity arises because human wants are virtually unlimited and perpetually renewing. As soon as one want is satisfied (e.g., getting a phone), a new want emerges (e.g., needing better internet service).
To address this gap between unlimited wants and limited resources, individuals and societies must make choices. Every choice involves a trade-off, setting the stage for subsequent economic concepts like Opportunity Cost.
### Defining Economics and Its Agents
Economics, therefore, is the study of decision-making under conditions of scarcity. It examines how societies organize production, distribution, and consumption.
#### Goods and Services
Economic resources are used to produce goods and services. Goods are tangible items, such as textbooks, phones, or bags of cement. Services are intangible activities provided by others, such as teaching, healthcare, or transportation (tro-tro ride).
#### Economic Agents
Three main groups make economic decisions: Households (consumers), Firms (producers), and Government (regulator and provider of public goods). These agents interact continuously in the circular flow of income.
### Two Perspectives: Microeconomics vs. Macroeconomics
Economists employ two primary lenses to study the world.
#### H3: Microeconomics: The Small Picture
Microeconomics focuses on the behavior and decisions of individual economic units. This includes individual consumers, specific firms, and the price determination within single markets.
Microeconomic questions include: Why did the price of pure water increase in Accra? How many workers should a small poultry farm hire? It is economics viewed through a microscope.
#### H3: Macroeconomics: The Big Picture
Macroeconomics focuses on the performance and behavior of the economy as a whole (aggregate variables). It examines national and international economic issues.
Macroeconomic questions include: What is Ghana’s current unemployment rate? What caused the recent inflation spike? How does government borrowing affect the entire nation’s growth (GDP)?
### Economics as a Science: Positive vs. Normative Statements
To maintain objectivity, economics distinguishes between factual claims and value judgments.
#### H3: Positive Economics
Positive economic statements are factual and objective. They describe ‘what is’ or ‘what was.’ These statements can be tested, proven true, or proven false using empirical data.
Example: “A 10% increase in the price of petrol will decrease demand by 5%.” This is a testable hypothesis.
#### H3: Normative Economics
Normative economic statements are subjective and based on opinions, values, or ethics. They describe ‘what ought to be’ or ‘what should be.’ They cannot be scientifically tested.
Example: “The government should impose higher taxes on luxury imports to discourage consumption.” The use of words like ‘should’ or ‘ought’ signals a normative claim.
## SECTION 3: Local Context
Economics is the daily engine of Ghana. When a student chooses to buy affordable bread instead of the more filling ‘koko’ for breakfast, they are responding to scarcity and making a rational microeconomic choice based on limited funds.
On a national scale, the impact of high inflation on the Cedi exchange rate is a massive macroeconomic challenge. When the government decides between investing in new road networks for the GPRTU or allocating funds for free SHS, they are managing scarce budgetary resources under political and social pressure.
The bustling Makola Market acts as a living laboratory for microeconomics, showcasing how prices for goods like tomatoes and onions are determined by the immediate forces of supply and demand, not national policy. Understanding economics is essential for navigating the reality of the Ghanaian market.
## SECTION 4: Self-Check Quiz
**1. Which concept is the fundamental problem in economics that forces individuals and societies to make choices?**
A. Unlimited Wants
B. Government Regulation
C. Scarcity
D. Opportunity Cost
**2. A Ghanaian economist is hired to analyze how the introduction of the new electronic levy (E-Levy) affects the profit margin of mobile money agents. This study falls under which branch of economics?**
A. Positive Economics
B. Macroeconomics
C. Normative Economics
D. Microeconomics
**3. Identify the Normative statement among the following:**
A. Ghana’s GDP grew by 5.4% last year.
B. The unemployment rate for youth aged 18-25 is 13%.
C. The minimum wage should be doubled to improve workers’ living standards.
D. Increased rainfall typically leads to a lower price for maize.
**Answer Key: 1. C; 2. D; 3. C.**
## SECTION 5: Premium Bridge
Don’t just read—Master the entire SEM 1 syllabus. Download our NaCCA-aligned Premium Teacher’s Suite or Student Mastery Handout for the full 18-week experience.
