Scarcity, Choice, and the Cedi: Defining Economics in the Ghanaian Context | Economics SHS 1 SEM 1 WEEK 1 (WASSCE & NaCCA Aligned)

NaCCA Alignment: Learning Objectives

By the end of this study module, you should be able to:

• Define Economics based on the core relationship between unlimited wants and scarce resources (NaCCA Content Standard 1.1).
• Distinguish clearly between Microeconomics and Macroeconomics using Ghanaian examples.
• Differentiate between Positive Economics (facts) and Normative Economics (opinions or value judgments).
• Identify essential career pathways for economists in the Ghanaian public and private sectors.

The Unavoidable Truth: Scarcity and Choice

Economics begins with one fundamental, unavoidable truth: Scarcity. Simply put, we cannot have everything we want. Human wants (food, better roads, new phones, more time) are essentially unlimited, but the resources needed to satisfy those wants (land, labor, capital, time, money) are finite and limited.

The core definition of Economics flows directly from this conflict. Economics is the social science that studies how individuals, firms, and governments make choices to allocate scarce resources to satisfy their unlimited wants.

Feynman Technique: Explaining Scarcity to a Primary School Learner

Imagine your mother gives you GH₵10.00, and you want to buy waakye (GH₵8.00) and a bottle of Fanta (GH₵5.00). You want both, but your resource (GH₵10.00) is not enough. You must choose. That lack of enough money is scarcity, and deciding what to buy is the economic problem.

Understanding the Economic Universe

Goods vs. Services

Economic activity revolves around producing and consuming Goods and Services. Goods are tangible items you can touch and store, like a textbook, a desk, or a tin of sardines. Services are intangible actions or activities provided, like teaching, banking, cleaning, or a tro-tro ride.

The Two Lenses: Microeconomics vs. Macroeconomics

Economists view the world through two primary lenses:

1. Microeconomics: This is the study of economics at the individual level. It looks at the behavior of individual households, single firms, and specific markets. Example: The price of gari at Kaneshie market or why Ghana Textiles Limited decided to hire more workers.
2. Macroeconomics: This is the study of the economy as a whole (the aggregate). It focuses on national issues like unemployment rates, inflation, Gross Domestic Product (GDP), and national debt. Example: Analyzing how the Bank of Ghana’s interest rate policy affects the nation’s total economic growth.

Fact vs. Opinion: Positive and Normative Economics

In economics, we must be careful not to confuse what is happening with what we think should happen.

• Positive Economics: Deals with facts and can be tested or proven. It describes ‘what is.’ Statement: ‘If the price of fuel increases, the cost of transport will rise.’ (Testable fact).
• Normative Economics: Deals with value judgments, opinions, and policy goals. It describes ‘what ought to be.’ Statement: ‘The government should reduce import duties to protect local industries.’ (A policy recommendation/opinion).

WASSCE Strategy: Pro-Tips for Exam Mastery

WASSCE examiners often test your ability to differentiate Positive from Normative economics. Memorize this rule: If the statement contains keywords like ‘should,’ ‘ought to,’ ‘must,’ or ‘better,’ it is almost certainly Normative because it implies a judgment or recommendation. If it simply states a cause-and-effect relationship that can be tested with data, it is Positive.

Career Prospects for Economists

An Economics degree opens doors across multiple sectors in Ghana:

• Public Sector: Bank of Ghana, Ghana Statistical Service, Ministry of Finance, Ghana Revenue Authority (Policy Analyst, Data Scientist).
• Private Sector: Commercial Banking, Investment Banking, Consultancy, Entrepreneurship, and Market Analysis (Financial Analyst, Business Consultant).

Section 3: The Local Laboratory

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Section 4: Self-Check Quiz

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Section 5: The Premium Bridge