Scribd
Upload
28 views

Econ Dev

The document provides an overview of key economic concepts including: - Microeconomics focuses on individual decision making while macroeconomics looks at whole economies and government decisions. - Positive economics analyzes conditions factually while normative economics discusses solutions to problems. - The four factors of production are land, labor, capital, and entrepreneurs. - Economic systems answer questions about what, how, how much, and for whom to produce through private ownership (market), government control (command), or a combination (mixed economies). - Demand and supply determine market equilibrium price through schedules and curves that represent willingness and ability to purchase/produce goods based on factors like price, income, and expectations.

Uploaded by

ibanezlouisemarguerite
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
28 views

Econ Dev

The document provides an overview of key economic concepts including: - Microeconomics focuses on individual decision making while macroeconomics looks at whole economies and government decisions. - Positive economics analyzes conditions factually while normative economics discusses solutions to problems. - The four factors of production are land, labor, capital, and entrepreneurs. - Economic systems answer questions about what, how, how much, and for whom to produce through private ownership (market), government control (command), or a combination (mixed economies). - Demand and supply determine market equilibrium price through schedules and curves that represent willingness and ability to purchase/produce goods based on factors like price, income, and expectations.

Uploaded by

ibanezlouisemarguerite
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 7

ECONOMIC DEVELOPMENT

REVIEWER FOR MIDTERMS

I. WHAT IS ECONOMICS?
> Study that is concerned with how individuals, institutions and society make best choices
> Concerned with efficient use of limited productive resources for the purpose of attaining
maximum satisfaction of our wants.
WORDS:
> Improvement, Ideas, Planning
> Management of Resources
> Distribution of goods, services, and resources

II. BRANCHES OF ECONOMICS

MICROECONOMICS MACRO ECONOMICS


Focuses on the individual perspective at a Seeks to find general perspective at a
consumer level national level.
Concerned with decision making by individual Looks at the decision of countries and
units government
Study of individual and business decisions Studies the whole economy

III. THEORIES IN ECONOMICS (Ceteris Paribus- all else equal)

POSITIVE (What is?) NORMATIVE (What ought to be done?)


Focuses on facts and cause & effect Finds solution
Analyzing and understanding condition Discuss economic problems/issues
Provides facts and data and explains
Describes the economic behavior of Provides suggestions
individuals and societies
IV. FACTORS OF PRODUCTION
1. Land → Includes natural resources used in production
2. Labor → Consists of physical and mental talents of individuals to use in production
3. Capital → Medium to produce goods and services (includes all manufacturing aids)
4. Entrepreneurs → Makes the 3 factors happen. Risk takers and Innovators

V. DIVISIONS OF ECONOMICS
1. Production → INPUTS = factors of production; OUTPUTS = goods and services
2. Distribution → Marketing of goods and services
3. Exchange → Transferring of goods and services in return of something
4. Consumption → Utilization
5. Public Finance

VI. ECONOMIC GOALS


1. Growth → better goods and services develop a higher standard of living
2. Full employment → provide suitable jobs for all
3. Efficiency → Achieve the maximum fulfillment of wants using the available productive
resources
4. Price Level Stability → Avoid inflation and deflation
5. Freedom → Guarantee that we have a high degree of freedom in our economic activities
6. Equitable Distribution of Income → ensure that no citizen faces poverty
7. Security → Provide support to those who are in need
8. Balance of trade → Import = Export

VII. What is Scarcity? When supply of a resource cannot meet demand


VIII. ECONOMIZING PROBLEM
To ensure that the expected number of productions for a country is met.

Productive Possibilities Curve Production Possibilities Table


Graphical presentation: a frontier for its List the different combinations of 2 products
shows the limit of attainable outputs that can be produces with a specific set of
resources (pinagkakasya ang resources to
make products)

IX. PRODUCTION POSSIBILITIES (ASSUMPTIONS)


→ Full employment and productive efficiency
→ Fixed resources - A fixed resource is any resource that will always be available with a room
arrangement.
→ Fixed technology
→ Goods
> CONSUMER GOODS – a type of good that is utilized by the consumers
> CAPITAL GOODS - The purpose of capital goods is to help produce other products.
They are meant to be used for production

X. LAW OF INCREASING OPPORTUNITY COST


Opportunity Cost- The amount of other products that must be forgone or sacrificed to
obtain 1 unit if a specific good

XI. ECONOMIC SYSTEM


A particular set of institutional arrangements and a coordinating mechanism to respond
to the economizing problem
1. Traditional System → System being used by forefathers; Norms are based on generation to
generations
2. The Market System (Capitalist) → The private ownership of resources & the use of markets
and prices to coordinate and direct economic activities
3. Command System → government owns most property resources and government has the
control and power
4. Mixed Economies → A combination of 2 or more economic systems

XII. ECONOMIC QUESTIONS


For a country to employ what type of system that they are going to use, they need to
answer 4 economic questions
1. What to produce?
2. How to produce?
3. How much to produce?
4. For whom to produce?

XIII. PRODUCTION
Production → the process of transforming both fixed and variable inputs into finished
goods and services
Fixed Inputs → inputs that do not change with the volume of production
Variable inputs → inputs that changes in accordance with the volume of
production
Stages of Production
1. Increasing rate of production → faster production if machineries or factors are
new higher inputs = higher outputs
2. Stage of Declining Production → the rate of increase in inputs is greater than
the rate of increase in outputs
3. Law of Diminishing Return (Marginal Utility) → the added satisfaction declines
as a consumer acquires additional units of a given product
XIV. DEMAND AND SUPPLY

DEMAND SUPPLY
It shows the various amounts of a product that It shows the amount of a product that producers
consumers are willing and able to purchase at are willing and able to suppy at each of a series of
each of a series of possible prices during a possible prices during a specified period of time
specified period of time
DEMAND SCHEDULE SUPPLY SCHEDULE
table showing how much of a given product a table showing how much of a given product a
household would be willing to buy firms would be willing to supply
DEMAND CURVE SUPPLY CURVE
representation of how much of a given product a representation of how much of a given product a
household would be willing to buy firms would be willing to supply
DETERMINANTS DETERMINANTS
-taste/ customer preferences -resources/ prices
-number of buyers -technology
-income -taxes and subsidies
>superior or normal goods-products -number of sellers
whose demand varies directly with -producers’ expectations
income
>inferior goods- whose demands varies
indirectly with income
-consumer’s expectations
-price of related goods

MARKET EQUILIBRIUM is when demand is equal to supply

XV. NATIONAL INCOME ACCOUNTING


A term used in economics that refers to the bookkeeping system that a national government
uses to measuure the level of economic activity in a given time period

Gross Domestic Product → The market value of all final products and services produced by the
resources of economy during a specified period of time within its boundaries

Gross National Product → The measure of total value of final good and services produced by
the citizens of one economy even outside its boundaries

Transfer Payments → transactions wherein one party is not obliged to deliver a good or service
in return for the payment
XVI. ELASTICITY
Elasticity → It is a measure of how much buyers and sellers respond changes in market
conditions

Price Elasticity of Demand → It measure how much the quantity demanded responds to
a change in price

Income Elasticity of Demand → It measure how the quantity changes as the consumers’
income changes

You might also like