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Applied Economics-Lesson 1

Economics is the study of how societies allocate scarce resources to satisfy unlimited human wants. It can be viewed from different perspectives, such as the proper allocation of resources, the science of choice, or how individuals make choices. Economics is divided into microeconomics and macroeconomics. Microeconomics examines individual units like consumers and firms, while macroeconomics studies aggregates like GDP, employment, and inflation. The core topics of economics include production, distribution, exchange, consumption, and public finance. Logic, mathematics, and statistics are important tools used in economics. The key economic resources are land, labor, capital, entrepreneurs, and foreign exchange.

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Anne Reshier
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343 views

Applied Economics-Lesson 1

Economics is the study of how societies allocate scarce resources to satisfy unlimited human wants. It can be viewed from different perspectives, such as the proper allocation of resources, the science of choice, or how individuals make choices. Economics is divided into microeconomics and macroeconomics. Microeconomics examines individual units like consumers and firms, while macroeconomics studies aggregates like GDP, employment, and inflation. The core topics of economics include production, distribution, exchange, consumption, and public finance. Logic, mathematics, and statistics are important tools used in economics. The key economic resources are land, labor, capital, entrepreneurs, and foreign exchange.

Uploaded by

Anne Reshier
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Revisiting

Economics as a
Social Science
OBJECTIVES
• Define economics
• Determine the importance of
economics
• Describe the nature of economics
What is economics?
• Study of what constitutes rational
human behavior in the endeavor to
fulfill needs and wants
• Understanding how society allocates its
scarce resources
• Almost always, human activities involve
economics
ECONOMICS
“Oikanomia” – Greek word which means
household management
ECONOMICS
FROM
DIFFERENT
PERSPECTIVES
Economics is the proper
allocation and efficient
use of available
resources for the
maximum satisfaction
of human wants.

FAJARDO
Economics is the study
of how societies use
scarce resources to
produce valuable
commodities and
distribute them among
different people.

SAMUELS
ON
Economics is
the science of
choice.

NORDHAU
S
Economics is a scientific
study which deals with
how individuals and
society in general make
choices.

SICAT
Economics is the study
of how man could best
allocate and utilize the
scarce resources of
society to satisfy his
unlimited want.

CASTILLO
Economics is the branch
of knowledge that deals
with the production,
distribution and
consumption of goods
and services.

WEBSTER
The Economic
Problem
ECONOMICS
AS A PROCESS

UNLIMITE MAKE
SCARCITY
D WANTS CHOICES
ECONOMIC
ACTIVITIES earning
money
buying
goods and
services
depositing and
withdrawing money
in the bank
THE NATURE
OF ECONOMICS
Economics is a
Science.__________________

its laws and principles are arrived at only


after a long series of observations and
experimentations
Economics, as
a Social
__________________

Science.
it is the study of the relations between
people during the production,
distribution and consumption of wealth
in human society
Economics has more
advantages as a scientific
discipline for two major
__________________
reasons:
1. Economic motives of human beings may be
more regular and therefore persistent.
2. There is more factual information in the
form of statistics.
MACROECONO MICROECONOM
MICS ICS
ECONOMICS

MACRO

MICRO
____________________

deals with the economic behavior of the whole


economy or its aggregates
____________________

also known as Employment and


Income Analysis
is concerned with:
• gross national product
• level of employment
• national income
• general level of prices
• total expenditures
____________________
deals with the economic behavior of individual
units such as the consumers, firms and owners
of the factors of production
____________________

also known as Price Theory


is concerned with:
• price of rice
• number of workers in a
certain firm
• income of Mr. Fu
• expenditures of PLDT
Public
Exchange
Finance
Distribution
Consumption
Production

DIVISION OF
PRODUCTIO
refers to theN
process of producing or creating
goods needed by the households to satisfy their
needs

INPUTS factors of production

OUTPUTS goods and services


DISTRIBUTION
refers to the marketing goods and services to
different economic outlets for allocation to
individual consumers
EXCHANGE
process of transferring goods and services to a
person or persons in return for something
CONSUMPTIO
refers to the N
proper utilization of economic
goods
PUBLIC FINANCE
pertains to the activities of the government
regarding taxation, borrowings and expenditures
TOOLS OF
ECONOMICS
TOOLS OF ECONOMICS
1. Logic – It is a science that deals with sound
thinking and reasoning.
2. Mathematics – It is the science that deals
with numbers and their operations.
3. Statistics – It is branch of mathematics that
engages with the analysis and interpretation
of numerical data.
ECONOMIC
ECONOMIC RESOURCES
______________________________

also known as factors of production or inputs

LAND LABOR CAPITA


L

ENTREPRENEUR FOREIGN
ECONOMIC RESOURCES
1. Land – consist of free gifts of nature
which includes all natural resources
above, on and below the ground

• soil
• rivers
• lakes
• oceans
• forests
• mountains
• mineral resources
• climate
ECONOMIC RESOURCES
2. Labor – refers to all human efforts,
be it mental or physical, that help to
produce satisfying goods and services.

- represents the human capital available


to transform raw or natural resources
into consumer goods
- considered flexible resource as
workers can be allocated to different
areas of the economy
ECONOMIC RESOURCES
3. Capital – can represent the monetary
resources companies use to purchase
natural resources, land and other
capital goods.
- also represents the major physical
assets individuals and companies use
when producing goods or services
ECONOMIC RESOURCES
4. Entrepreneurs – the organizer and
coordinator of the other factors of
production

- The one who is engaged in economic


undertakings and provides society
goods and services it needs.
ECONOMIC RESOURCES
5. Foreign Exchange – refers to the
dollar and dollar reserves that the
economy has.

- Part of economic resources because


we need foreign currency, particularly
dollars for international trading and
buying of raw materials from other
countries
- Dollar is the international medium of
currency

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